Behavioral Health
- Behavioral health is a rapidly growing area in the healthcare sector, but it faces significant operational and financial challenges as companies scale and investor interest increases. Behavioral health organizations need to adopt innovative strategies to improve operations and financial performance, often requiring external expertise to navigate these complexities. They highlight the importance of effective management, strategic planning, and maintaining a focus on patient care amidst financial pressures, such as rising costs and debt. The experts emphasize the need for organizations to communicate their mission clearly, engage employees, and ensure consistent quality of care. They also advise investors to assess management’s ability to respond to data, maintain a positive organizational culture, and manage financial metrics effectively.
Drug & Device
- New FDA advertising rules require drugmakers to use simpler language and no distractions when explaining their medications’ risks and side effects. The FDA spent more than 15 years crafting the guidelines, which are designed to do away with industry practices that downplay or distract viewers from risk information. Many companies have already adopted the rules, which become binding Nov. 20.
- The U.S. Department of Justice (DOJ) recently published a final rule on the accessibility of medical diagnostic equipment (MDE) and other accessibility-related practices that promises to have broad impact on the health care industry. Although the rule is limited to state and local government’s healthcare practices, it is likely only a matter of time before the rule’s mandates will be imposed on the entire health care industry.
Equity & Equality
- The Department of Health and Human Services (HHS) Office of Civil Rights (OCR) published final rules implementing anti-discrimination provisions under Section 1557 of the Affordable Care Act. These rules apply to health programs receiving federal financial assistance and prohibit discrimination based on race, color, national origin, sex, age, or disability. Covered entities must meet several upcoming deadlines, including appointing a Section 1557 Coordinator by November 2, 2024, and ensuring non-discriminatory use of patient care decision support tools by May 1, 2025. By July 5, 2025, entities must post notices of language assistance services and adopt comprehensive policies and procedures to ensure compliance. The rules also require training for relevant employees on these policies within specific timeframes.
Fraud & Abuse
- Anti-Kickback Statute (AKS) enforcement is shifting away from COVID-19 pandemic-era fraud and towards unlawful marketing and referral practices. The Justice Department and HHS’ Office of Inspector General anticipate an uptick in enforcement activity, particularly against Stark law violations. Life sciences and healthcare companies should bolster compliance efforts to avoid scrutiny and potential whistleblower actions.
- The Office of Inspector General (OIG) recommends increased oversight of remote patient monitoring (RPM) services and billing in the Medicare program. The OIG report found that RPM is not being used as intended, with many enrollees not receiving all required components and concerns about fraud and abuse. The OIG also found that CMS lacks key information about RPM use, including the types of devices and health data being collected.
- The future of the Stark law is uncertain following a district court decision that a False Claims Act lawsuit could not be resolved without further briefings on the U.S. Supreme Court’s recent reversal of the Chevron deference doctrine. In July, the Supreme Court overturned Chevron deference, which had required judges to defer to federal agency interpretations in ambiguous legal cases, now mandating independent judicial interpretation. The district judge emphasized the need to interpret regulations independently, leading to the lawsuit’s dismissal due to insufficient detail in the plaintiff’s allegations. This change in judicial approach raises questions about the Stark law’s application, as it involves complex compliance requirements and exceptions.
Intellectual Property
- Companies developing cell and gene therapies face a critical decision: patenting or keeping information as a trade secret. Factors like reverse-engineering risk, patent eligibility, business model, and infringement detection influence this choice. Enforcement strategies for patents and trade secrets differ in goals, timing, pleadings, and discovery logistics, requiring careful planning.
Mergers & Acquisitions
- Behavioral health mergers and acquisitions (M&A) have recovered and stabilized, driven by factors like the emergence of mental health platforms and positive reimbursement changes. Joint venture (JV) partnerships continue to gain popularity in the mental health sector. Behavioral health providers are expanding their geographical reach by helping traditional nonprofit health systems operate more efficiently and meet the high demand for behavioral health services. Telehealth has become a common treatment method for mental health patients, with Congress extending telehealth flexibility waivers through 2024.
- The Federal Trade Commission (FTC) recently published revisions for pre-merger notification requirements under the Hart-Scott-Rodino Antitrust Act. The rule revises forms and instructions to address information gaps and ensure that transactions do not stifle competition. Entities must file information about entities and individuals influencing decision-making post-merger, non-horizontal relationships, business lines, serial acquisitions, and roll-ups.
No Surprises Act
- The Fifth Circuit Court of Appeals’ recently upheld regulations defining the qualifying payment amount (QPA) under the No Surprise Billing Rules. The QPA is a key factor in determining how much individuals and health plans must pay out-of-network providers in certain situations. The court’s decision upheld the rules governing how QPAs will be determined and the information that plans need to disclose to providers about how they determined a QPA.
Ransomware
- The healthcare industry is increasingly targeted by ransomware attacks, with notable incidents such as the Change Healthcare breach affecting nearly 100 million individuals. Healthcare organizations face complex decisions regarding whether to pay ransoms, balancing the need to minimize business disruption and protect sensitive data against the risks of legal liability, increased future targeting, and ethical concerns. Paying a ransom does not eliminate legal obligations to report breaches, and it may expose organizations to penalties if payments are made to sanctioned entities. The healthcare sector’s critical services and sensitive data make it a prime target, necessitating robust cybersecurity measures and comprehensive incident response strategies. Organizations must carefully evaluate their legal and strategic options to effectively manage ransomware risks.
Reproductive Rights
- Texas lawmakers will consider a bill that would reclassify mifepristone and misoprostol — two drugs commonly used in medication abortions — as controlled substances. This move mirrors a similar law in Louisiana, which has faced criticism from healthcare providers for potentially endangering patients’ lives. The Texas bill, if passed, would take effect in September 2025 and adds a muscle relaxant to the Schedule IV controlled substances list.
Telehealth
- States continue to modify telehealth laws and regulations, striking a balance between flexibility and quality care. While some federal telehealth flexibilities have been extended, the DEA’s remote prescribing rulemaking remains uncertain, potentially impacting providers beyond December 31, 2024. Enforcement efforts against telehealth fraud highlight the need for providers to prioritize compliance with evolving legal requirements.