Regulations & Guidance

The role of a health care entity’s governing board in the implementation and oversight of a compliance program is not always clear. Although board members are not often directly involved in care delivery, the Department of Health and Human Services’ Office of the Inspector General (OIG) views the governing board as integral to setting the tone for an organization’s compliance and oversight culture. To help the organizational leadership of health care entities understand how to oversee these compliance functions, the OIG, in collaboration with the Association of Healthcare Internal Auditors (AHIA), the American Health Lawyers Association (AHLA), and the Health Care Compliance Association (HCCA), has now published “Practical Guidance for Health Care Governing Boards on Compliance Oversight” (the “Guidance”).

The Guidance was developed through a landmark collaboration between government and private organizations representing key professionals in the health care compliance and integrity industry. First, the Guidance provides helpful distinctions between five essential functions that a robust compliance program should incorporate.

  • Compliance: to promote the “prevention, detection, and resolution” of identified issues that present risk under applicable laws, regulations, policies, or business standards.
  • Legal: to provide advice to the organization to address legal risks and help determine appropriate responses to potential and actual violations.
  • Internal Audit: to objectively assess “risk and internal control systems” (often data-based) used to evaluate the organization’s vulnerabilities and facilitate easy detection of compliance issues.
  • Human Resources: to manage “the recruiting, screening, and hiring of employees” who ultimately would have compliance-related responsibilities.
  • Quality Improvement: to review the clinical processes of the organization in view of patient needs, safety, and efficiency.

Then, the remainder of the 19-page Guidance includes references to other OIG publications, regulatory commentary, and external resources on board governance, compliance responsibilities, and fiduciary obligations. The overall substance of the Guidance provides educational information on the role of health care governing boards in compliance oversight, including the following takeaways:


Continue Reading OIG Teams Up With Private Sector to Provide Guidance to Health Care Governing Boards

On April 10, ONC released its Report to Congress on Health Information Blocking (the “Report”).  Here is a brief summary of the report, the full text of which is available here.

ONC has stated that its views health information blocking as frustrating the goals of HITECH and the Meaningful Use initiative.  ONC defines information blocking as conduct which:

  1. Interferes with the ability of authorized persons or entities to exchange electronic health information; and
  2. is done knowingly with the intent to block information exchange; and
  3. is not justified by reasonable business, technological, or public policy reasons.

ONC recognizes that there may legitimate reasons why EHR systems are not interoperable.  The Report focuses on the non-legitimate reasons, and highlights the following behavior:

  1. Contract terms which restrict individuals’ access to their EHR;
  2. Charging prices or fees for data exchange, portability, and interfaces which make exchanging EHR cost prohibitive;
  3. Developing health IT in “non-standard” ways which may increase the costs of sharing health information (particularly when interoperability standards have been adopted);
  4. Developing health IT in ways which may “lock in” users or their data, leading to fraud, waste or abuse, or otherwise impede innovation in health information exchange.

The Report is careful to explain that ONC would weigh such practices against legitimate considerations whether they are technological, regulatory, or economic in nature.


Continue Reading ONC Releases Report to Congress on Health Information Blocking

On March 30, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule (CMS Proposed Rule) detailing the policies it will introduce during Stage 3 of the Medicare and Medicaid Electronic Health Record (EHR) Incentive Program. In tandem with CMS’s publication, the Office of the National Coordinator for Health Information Technology (ONC) also published a proposed rule (ONC Proposed Rule) providing a new edition of health information technology (HIT) certification criteria. The proposed rules are intended to work together in streamlining the establishment of an interoperable nationwide health information infrastructure.
Continue Reading CMS and ONC Announce New Proposed Rules for Stage 3 of the Medicare and Medicaid EHR Incentive Program and HIT Certification Criteria

On February 23, the Department of Treasury and the Internal Revenue Service (collectively, the “Agencies”) issued Notice 2015-16, the first piece of guidance on the Affordable Care Act’s “Cadillac Tax.” The Cadillac Tax is a 40 percent excise tax that is imposed on high-cost health plans under Section 4980I of the Internal Revenue Code (Code), which provision was added to the Code by the Affordable Care Act (ACA).

Very generally, the Cadillac Tax applies to taxable years beginning after December 31, 2017 (i.e., the 2018 plan year for calendar-year plans), and provides that a 40 percent excise tax will be imposed on “applicable employer-sponsored coverage” in excess of statutory thresholds (in 2018, $10,200 for self-only coverage, and $27,500 for “other than self only” coverage (e.g., family coverage)). Notably, the excise tax applies only to the “excess benefit,” i.e., the amount by which the cost of the applicable employer-sponsored coverage exceeds the statutory thresholds. Furthermore, this excise tax is to be calculated on a monthly basis, so that it applies only in the months in which there is an “excess benefit.” The cost of the applicable coverage is to be determined under rules similar to those used to calculate COBRA premiums.

Under Section 4980I, the employer is responsible for calculating the total amount of the excise tax and the excess benefit, while the actual liability for the excise tax rests with the insurer (in the case of an insured plan), the employer (in the case of a Health Savings Account (HSA)), or the “person that administers the plan” (in the case of other types of coverage). Hence, in the case of self-funded coverage that does not involve an HSA, it is unclear who (i.e., the plan sponsor, the third-party administrator, etc.) will be responsible for this liability (and note that Notice 2015-16 does not provide any guidance or clarity on this last point).


Continue Reading IRS Provides First Guidance on ACA’s ‘Cadillac Tax’

On December 23, 2014, FDA Commissioner Margaret A. Hamburg announced that the agency favors supplanting the outright ban on blood donations from men who have sex with men (MSM) with a new policy that would prohibit donations from men who have engaged in homosexual activity in the previous 12 months. This shift for MSM would

On December 12, 2014, the Centers for Medicare & Medicaid Services (CMS) announced a proposed rule that would broaden rights for same-sex spouses at US hospitals. The proposed rule is aimed at “ensur[ing] that same-sex spouses in legally-valid marriages are recognized and afforded equal rights in Medicare and Medicaid participating facilities.”

In its 2013 decision

With under a week remaining for drug producers to comply with the first stages of Washington State’s King County drug take-back and disposal program, industry and regulators alike are watching closely. As one of two first-in-the nation programs requiring drug manufacturers to bear the costs of organizing and implementing a drug take-back and disposal program

Health plans may continue to engage in healthcare transactions without using unique health plan identifiers (“HPIDs”)—at least for now. The Department of Health and Human Services (“HHS”) announced it would indefinitely delay enforcement of regulations that would have required health plans to obtain and use Health Plan Identifiers in HIPAA transactions as early as November

In a memorandum released yesterday, CMS announced that it is not finalizing the proposed guidance issued on September 29, 2014 regarding Direct and Indirect Remuneration and Pharmacy Price Concessions for Contract Year 2016.

The September 29th memorandum contained draft guidance that intended to implement changes to the Part D Program’s definition of “negotiated prices” that were finalized in May 2014 and effective for 2016. 79 FR 29844. Negotiated prices are, in short, the amounts that pharmacies actually receive and retain as payment on a Part D claim. Negotiated prices are reported by Part D sponsors to CMS via monthly Prescription Drug Event (PDE) submissions. Direct and Indirect Remuneration (DIR) are price concessions, including discounts and rebates, that serve to reduce the cost of the Part D drug. DIR is reported to CMS subsequent to the contract year to which the DIR relates. In the May 23rd final rule, CMS sought to clarify what comprises negotiated prices and therefore should be reported via PDEs. The amended definition of negotiated prices now includes “all price concessions from network pharmacies except those contingent price concessions that cannot reasonably be determined at the point-of-sale” and excludes “additional contingent amounts, such as incentive fees, if these amounts increase prices and cannot reasonably be determined at the point-of-sale”. 79 FR 29962. The additional contingent amounts that cannot be determined at the point-of-sale would be reported via the DIR reports. Okay, I’m following.


Continue Reading CMS Backpedals on DIR Pharmacy Price Concessions for CY2016

On October 16, 2014, the Centers for Medicare & Medicaid Services (“CMS”) and the Office of the Inspector General (“OIG”) announced the continuation of the Accountable Care Organization (“ACO”) fraud and abuse waivers for an additional year. The Affordable Care Act (“ACA”) authorized creation of the Shared Savings Program to facilitate development of ACOs in