Federal Regulatory Update and Recent Litigation

Federal Regulatory Update:

The Department of Health and Human Services (HHS) recently published 84 FR 59549, requiring annual inflation-related increases to the civil monetary penalties associated with the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the Act).  The Act aims to improve the effectiveness of civil monetary penalties and to maintain a deterrent effect against violations of federal statutes or regulations. 

Update on Prescription Drug Legislation

Last week, the House approved two bills intended to improve prescription drug pricing transparency for patients.  H.R. 2115, the Public Disclosure of Drug Discounts Act, requires CMS to publish certain payment information regarding pharmacy benefit managers (PBMs) and prescription drugs.  The House also approved H.R. 1781,  Payment Commission Data Act of 2019, which together with H.R. 2115, proposes amending Titles XVIII and XIX of the Social Security Act to provide greater transparency of discounts provided by drug manufacturers.  Both bills should now progress to the Senate for consideration. 

Recent Trends in Nursing Home Complaints, Final Regulatory Rule Regarding Identifiers, and a $1.6 Billion Dollar Judgment for ACOs

Nursing Home Complaints:   The Office of Inspector General (OIG) previously found that a few states fell short in the timely investigation of the most serious nursing home complaints between 2011 and 2015. To complement this report, the OIG published an interactive map that displays details on nursing home complaint trends between 2011 and 2015.  The OIG then published a new interactive map to update the information for years 2016 through 2018.

Two Recent Cases On Self Pay Issues and a Failed ERISA Filing

Below are two recent New Jersey Federal District Court cases. In one matter, a group of Plaintiffs filed a class action against Quest regarding the difference in prices that Quest charges self-pay patients and patients with insurance.   In the second case, a New Jersey Federal District Court awarded attorneys’ fees and costs to a defendant regarding a complaint filed by an out of network provider.  Both of these cases may impact your practice. 

Executive Orders Issued by the Trump Administration Regarding the Inappropriateness of Guidance Documents

Two Executive Orders: 84 FR 55235 and 84 FR 55239

Following SCOTUS’ ruling in Azar v. Allina Health Services reported by us here, in which the Court invalidated CMS’ Part C policy for failure to comply with  notice and comment rulemaking before applying the policy, the executive orders issued by the Trump Administration on October 9, 2019 “Promoting the Rule of Law Through Improved Agency Guidance Documents” and “Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication” are both aimed at transparency in the regulatory process and to curtail guidance documents from being improperly used by agencies in lieu of following public notice-and-comment mandates of the Administrative Procedure Act. 

Health Law Developments

New Jersey State Regulatory Issues

51 N.J.R. 1493(a) – Proposed Regulation – This proposal establishes the County Option Hospital Fee Pilot Program. The purpose of the pilot program is to increase financial resources through the Medicaid/NJ FamilyCare program to support local hospitals in providing necessary services to low-income residents. The pilot program will be in effect for a period of five years from April 30, 2019 through April 30, 2024.   Each participating county can impose a local health care-related fee on hospitals within its borders. 

Significant Recent Regulatory and Statutory Developments

New Stark and Anti-Kickback Exceptions: Just yesterday, the Department of Health and Human Services issued proposed rules that have yet to be published in the federal registry, that loosen the prohibitions in the Stark Law and Anti-Kickback Statute to include new exceptions centered on value-based arrangements.  The OIG drafted the proposed rule regarding the Anti-Kickback Statute and CMS drafted the proposed rule regarding the Stark Law. 

FDA Releases New Guidance

On September 27, 2019, the Food and Drug Administration (FDA) released new guidance, replacing the December 2017 guidance, regarding clinical decision support (CDS) software. The new guidance expands the scope of the agency’s control of CDS software developed for providers, patients, and caregivers and clarifies which kind of software no longer is considered to be a medical device under the law. 

Two Recent OIG Advisory Opinions

As technology continues to be a pervasive platform for the healthcare industry in improving patient care, the Office of Inspector General of the Department of Health and Human Services (OIG) posted Advisory Opinion 19-04 which approved a technology company’s proposal to make visible to federal health care program beneficiaries its online healthcare directory for searching and booking medical appointments and sponsored advertisements.