C&M Health Law

C&M Health Law

Analysis, commentary, and the latest developments in health care law and policy

Azar Rolls Out Expansion of Short-Term, Limited-Duration Insurance Plans

Posted in Health Care Reform & ACA
C&M Health Law

On Tuesday, February 20, Department of Health and Human Services (HHS) Secretary Alex Azar announced that the agency intends to expand access to short-term, low-cost insurance policies. On Wednesday, HHS published its proposed rule, which promises to reduce restrictions on such limited-duration policies. The short-term insurance plans have fewer benefits and more limited consumer protections as compared to those proscribed by the Patient Protection and Affordable Care Act (ACA). While such short-term plans currently can only be carried for 90 days, the new proposal would extend that maximum coverage period to one year.

The proposed rule is in response to President Trump’s Executive Order from October 12, 2017, which called for HHS to expand access to low-cost insurance plans. The Executive Order asked the agency to explore the possibility of extending the maximum duration of such short-term, limited-duration plans in order to increase options for consumers. The short-term insurance plans are contemplated for individuals who are unemployed, between jobs, or otherwise looking to reduce premium costs for up to one year. The plans do not have to meet ACA requirements. Notably, they do not have to cover individuals with pre-existing conditions and they do not have to cover prescription drug plans. The plans offer more limited coverage for consumers, but impose less immediate financial burden through reduced premium cost. Insurers who sell the short-term plans would need to include clear statements on applications and plan documents that the coverage does not meet ACA requirements.

The proposed rule continues the Trump administration’s efforts to roll back the ACA and minimize its economic burden and comes just over a year after the president issued an Executive Order laying out that goal. It comes on the heels of earlier rules from the administration geared at stabilizing the individual and small group insurance markets. It also follows the signing of the new tax reform bill, which repeals the individual mandate of Section 5000A of the Tax Code and eliminates the shared responsibility payment for failure to obtain health insurance starting in 2019.

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“FCA ENFORCEMENT: DIFFERENT, BUT STILL HERE” – PART OF CROWELL & MORING’S RELEASE OF 2018 LITIGATION FORECAST

Posted in Events, Litigation
Crowell & Moring

Crowell & Moring has issued its “Litigation Forecast 2018: What Corporate Counsel Need to Know for the Coming Year.”

 The health care section of the Forecast, “FCA Enforcement: Different, But Still Here,” outlines how health care companies should expect continued enforcement of the False Claims Act, but with perhaps different emphasis on key areas such as drug pricing.

 The Forecast explores the important litigation trends and challenges that businesses may face in 2018, and it features an in-depth look at how data-driven innovation is driving new opportunities and risks for clients across industries.

 Be sure to follow the conversation on Twitter with #LitigationForecast.

 

FDA Issues New Guidance for Clinical and Patient Decision Support Software

Posted in Digital Health, EHR, Health IT
Jodi G. DanielMaya Uppaluru

This morning, the Food and Drug Administration released highly anticipated guidance on clinical and patient decision support that has been in the works at the agency for several years, advising the digital health community about how it plans to regulate software that offers recommendations or feedback to its users—both healthcare professionals, and patients and caregivers. It also provides guidance on FDA’s interpretation of new software provisions in Section 3060 of the 21st Century Cures Act.

Given the explosion of these innovative digital health tools and their strong potential to transform healthcare, this guidance is a significant development for tech companies and investors focusing on this space. Comments will be accepted for 60 days. Continue Reading

New Reimbursement for Remote Patient Monitoring and Telemedicine

Posted in EHR, Health IT, Medicare
Jodi G. DanielMaya Uppaluru

CMS announced important changes to Medicare reimbursement for remote patient monitoring and telemedicine that can help accelerate adoption and use of these digital health tools. These changes are implemented through two rules released this week that will take effect January 1, 2018. Understanding these rules can help you incorporate these tools into clinical practice and can positively affect the business model for technology developers and innovators.

What are these new rules and do they affect me?

The 2018 Quality Payment Program Final Rule provides policy updates to the Quality Payment Program (QPP), which was established by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and will be entering its second year. MACRA offers two “tracks” for eligible clinicians to take as they move toward value-based care:

  • Participation in QPP and its scoring, or
  • Participation in an Advanced Alternative Payment Model (APM).

The majority of Medicare payments are still tied to fee-for-service, but HHS has set a goal of moving to 50 percent of Medicare payments for alternative payment models by 2018. For previous coverage of QPP proposals, visit our summary here.

The 2018 Physician Fee Schedule Final Rule addresses revised payment policies for the Medicare physician fee schedule. Any provisions in the PFS rule typically apply to fee-for-service type providers. Continue Reading

Interoperability by Design: FDA Issues New Final Guidance for Connected Medical Devices

Posted in FDA, Health IT
Jodi G. DanielMaya Uppaluru

The FDA is focusing on safety and effectiveness of interconnected medical devices with the issuance of final guidance on medical device interoperability, released last week. As the FDA notes, medical devices are becoming increasingly connected to one another and to other technologies, and it is critical to address their ability to exchange and use information safely and effectively.

For device manufacturers, this guidance provides clarity on how the FDA is thinking about interoperability and patient safety in the premarket submission process and provides considerations for manufacturers in the development and design of interoperability medical devices. It demonstrates the FDA’s focus on the safety and effectiveness of devices as implemented in an interconnected environment and the expectations of FDA on manufactures to anticipate and design for anticipated uses and reasonably foreseeable misuses. Manufactures should consider this guidance in the design, development, and on-going monitoring of connected medical devices.

This guidance may be helpful for other audiences as well:

  • Care providers that frequently interact with medical devices in the course of patient care
  • Hospital IT teams who make device purchasing decisions
  • Vendors of health technologies that frequently exchange data with medical devices

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Four Health Care Company v. John Doe Cases: Scare Tactics, Accidental Disclosures, Hacking, and Impersonation Lead to Loss of Anonymity in Online Defamation Litigations

Posted in Litigation
Joe Meadows

Internet defamation (and intellectual property infringement) cases are on the rise.  And cases involving anonymous defendants are becoming more common.  They of course present tricky First Amendment issues.  Indeed, most such cases result in the anonymous defendants remaining masked and escaping liability.  But in four example health care cases – a scare tactic, accidental disclosure, hacking, and impersonation set of cases – the plaintiffs successfully took on the First Amendment challenge.  Knowing how these plaintiffs prevailed may help with your own response plan to a surprise cyber-attack by persons you don’t know.

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Hospitals Beware: Medicare Electronic Health Records Incentive Payments to Hospitals are in the OIG’s Crosshairs

Posted in Digital Health, EHR, Fraud, Waste & Abuse, Health IT
John BrennanJodi G. DanielLaura Cordova

The Department of Health and Human Services, Office of the Inspector General (OIG), modified its Work Plan to announce that the agency will be conducting a nationwide audit of hospitals that participated in the Medicare Electronic Health Records (EHR) Incentive Program (also known as the Meaningful Use Program).  The OIG review is focusing on hospitals that received Medicare EHR incentive payments between January 1, 2011 and December 31, 2016.

The OIG’s modification to its Work Plan follows last month’s report that CMS improperly paid an estimated $729 million in Medicare EHR incentives. In our prior client alert, we flagged these findings as a potential area for significant overpayment recovery actions and noted that such actions could pose risks for incentive payment recipients. Read our entire client alert on the OIG’s nationwide audit on hospitals that participated in the EHR Incentive Program Here.

Congress Remains Focused on Electronic Health Records

Posted in Digital Health, EHR, Health IT
Jodi G. Daniel

Congress is considering several adjustments to health IT policy which may have significant impact on the Centers for Medicare and Medicaid Services’ (“CMS”) electronic health records (“EHR”) incentives. On July 20th and 21st, Representatives met to discuss bipartisan legislation to improve the Meaningful Use program and introduced legislation that would authorize a CMS Innovation Center (“CMMI”) project to incentivize EHR adoption by behavioral health providers. The bills may be indicative of Congress’ attitude towards the Meaningful Use program, which has garnered criticism from providers for being burdensome.

On July 21, 2017, the House Committee on Energy and Commerce Subcommittee on Health held a hearing on H.R. 3120 and featured testimony from Cletis Earle, Chairman-Elect of the College of Healthcare Information Management Executives. The bill, sponsored by a group of bipartisan lawmakers, will allow CMS to modify the requirements of the Meaningful Use program in order to give the Secretary additional flexibility in implementing the program. Currently, providers and vendors must comply with the Stage 3 measures and objectives of the Meaningful Use program starting January 1, 2018 or be subject to Medicare reimbursement penalties. Earle argued that the implementation timeline for Stage 3 of the program is too rigorous for providers to meet and may lead to an increase in hardship exemption applications. Provider and vendor groups across the industry have suggested that the HHS Secretary Tom Price delay the Stage 3 obligations, noting that software implementation and cybersecurity issues have made the 2018 deadline unreasonable. Sponsors of H.R. 3120 note that the bill will reduce the burden on providers’ use of EHR systems, allowing providers to focus on care coordination and patient outcomes. In response, CMS noted that the proposed “Medicare Program; CY 2018 Updates to the Quality Payment Program,” which is open for comment through August 21, 2017, would give eligible providers an additional year to implement EHR technology that complies with the 2014 or 2015 edition of Certified Electronic Health Record Technology (“CEHRT”) and offers the opportunity to apply for hardship exemptions for the Advancing Care Information performance category of the Merit-based Incentive Payment System (“MIPS”). For more information, see our update on key proposals of the 2018 Proposed Rule here. Continue Reading

New Mental Health Parity Guidance on NQTL Disclosures May Signal Enforcement Priorities

Posted in Mental Health Parity
C&M Health Law

The regulators for the Mental Health Parity and Addiction Equity Act (MHPAEA) have just issued guidance on health plan disclosures for non-quantitative treatment limitations (NQTLs).  This guidance consists of an FAQ and a proposed model form for plan members to request information so they can determine whether their plan’s NQTLs are at parity.

The regulations define NQTLs broadly as non-numerical/non-dollar limits on the duration or scope of plan benefits, such as medical necessity and prior authorization requirements.  Over the past two years, Federal and State regulators have increasingly centered enforcement on NQTLs.  But because the term NQTL is so broad, their examinations are often not well-focused, creating compliance challenges.

The new model form could help limit these wide-ranging regulatory forays.  The form asks the member to identify a claim that was denied and to indicate the specific NQTL the plan cited as the basis for the denial.  It then provides a list of NQTLs that appear to be those the regulators believe are most likely to affect benefits.  This list includes plan rules on medical necessity, experimental/investigational services, prior authorization, step therapy and fail first standards, drug formularies, access to in-network providers, and provider reimbursement rules.

One purpose of the form is to “encourage uniformity among State reviews of health insurers’ compliance with the NQTL standards.”   (FAQ at page 2).  This suggests regulators should focus enforcement efforts on the more significant NQTLs—the items listed on the model form—and not engage in open-ended investigations of other medical management tools.

The model form lists information that plans must provide in response.  The list includes: plan language on the NQTL and the medical/surgical and mental health benefits to which it applies; the factors and evidentiary standards used to develop the NQTL; the methods and analysis used to develop the NQTL; and “any evidence” to establish that the NQTL is applied no more stringently to mental health than medical/surgical benefits.  To clarify that plans are not expected to make a massive document dump in response to the form, it may be helpful for the regulators to create a response form which permits the necessary information to be provided in a summarized manner.

The regulators plan to finalize this form by mid-December, and ask for comments to be submitted by September 13, 2017.

Supreme Court: FEHBA Preempts State Subrogation Prohibitions

Posted in Federal Employee Health Benefits Program (FEHB)
Christine M. ClementsA. Xavier BakerJoseph Records

The U.S. Supreme Court unanimously decided, in Coventry Health Care of Missouri, Inc. v. Nevils, that the Federal Employees Health Benefits Act (FEHBA) preempts state laws that prohibit subrogation recovery by health insurance carriers.

FEHBA expressly preempts state law. Specifically, “[t]he terms of any contract under this chapter [5 U.S.C. § 8901, et seq.] which relate to nature, provision, or extent of coverage or benefits (including payments with respect to benefits)” preempt state health insurance laws and regulations. Contracts between the Office of Personnel Management (OPM) and a health insurance carrier under the Federal Employees Health Benefits Program (FEHBP) each include a provision requiring the carrier to subrogate and pursue reimbursement of FEHB claims and to condition benefits on the carrier’s rights to subrogation and reimbursement.

The plaintiff in this case, a former federal employee, was injured in an automobile accident and received medical treatment covered under his FEHBP plan. He then sued and recovered a settlement award based on the accident. His FEHBP carrier asserted a lien against his settlement award and recovered the costs of his medical treatment pursuant to its FEHBP contract. The plaintiff then sued the carrier, alleging that its recovery of the costs of his medical treatment was prohibited by Missouri state law.

The Court first discussed whether FEHBA’s preemption provision preempts state laws that would prohibit a carrier’s right to recover subrogation, and then discussed whether such preemption is prohibited by the Supremacy Clause.

According to the Court, the language of FEHBA’s preemption clause unambiguously covers the contractual subrogation provision. The decision briefly acknowledges the presumption against preemption of state law, which the Missouri Supreme Court decision on appeal had applied to find no preemption of state law. In addition, the Court points to regulations at 5 C.F.R. § 890.106 promulgated by OPM in 2015 that specifically call for the contract provisions requiring subrogation and reimbursement. But the Court declined to analyze the presumption or the regulations in depth, finding that the statutory language unambiguously requires preemption and is reinforced by FEHBA’s context and purpose. The decision distinguishes its decision from dicta in Empire HealthChoice Assurance, Inc. v. McVeigh, 547 U.S. 677 (2006), in which the Court saw two plausible readings of the FEHBA preemption clause. The Court noted that its decision in that case turned on jurisdiction, not on choice of law, and the case did not require the Court to evaluate different readings of the provision.

After finding that FEHBA’s preemption clause covered the contractual provision requiring subrogation and reimbursement, the Court turned to the constitutional question of whether the Supremacy Clause allows preemption based on the terms of federal contracts. The Court held that preemption is constitutional because it is FEHBA—not the contract—that preempts state law. The decision dismisses the counterargument that FEHBA’s preemption provision (uniquely among preemption clauses) calls for the “terms of any contract” to supersede and preempt state law whereas the Supremacy Clause provides that only federal laws can preempt state laws. The Court characterized this argument as elevating “semantics over substance” because the language manifests the same Congressional intent to preempt.

By holding that FEHBA preempts state law, and that such preemption is constitutionally permissible, this decision ends a series of disputes between private litigants and FEHBP carriers over whether state subrogation prohibitions applied to health benefits covered under the FEHBP. Soon after its decision in Nevils, the Court denied certiorari for two other cases dealing with FEHBA preemption of state subrogation prohibitions, Bell v. Blue Cross and Blue Shield of Oklahoma, and Kobold v. Aetna Life Insurance Co.