Device Advice: New Guidance From the FDA on Medical Devices and Cybersecurity

Are medical devices, subject to pre- and post-market regulatory controls, under increasing cybersecurity scrutiny? The FDA recently published recommendations for consideration of cybersecurity management in a product’s design and development phases, and in preparation of pre-market submissions.[1] While the agency emphasizes that it has issued a guidance document containing only nonbinding recommendations, is there an underlying expectation that manufacturers address—and that agency staff assess— such planning as part of the approval process?

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From Competitors to Co-Adventurers, Seven Hospital Systems Join with Anthem Blue Cross to Shake Things Up in Southern California

Anthem Blue Cross and seven competing hospital systems in Southern California are joining forces to establish a new health plan offering, Vivity.[1]  Operating with a combined 14 hospitals and approximately 6,000 physicians, the venture has already announced its first major customer: the State of California’s pension fund manager, the California Public Employees’ Retirement System (CalPERS).

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Final Meaningful Use Rule: CMS Loosens its Grip

The Centers for Medicare & Medicaid Services (“CMS”) finalized a rule on August 29th which should give providers some breathing room in complying with meaningful use requirements for the Electronic Health Record (“EHR”) Incentive Program (the “Final Rule”).  The EHR Incentive Program was developed by CMS to motivate health care providers to use and implement EHR systems.  Under the EHR Incentive Program, hospitals and healthcare professionals can qualify for incentive payments from CMS for “meaningful use” of certified EHR technology (“CEHRT”).  However, both the definition of “meaningful use” and the technologies which qualify as CEHRT are moving targets under the EHR Incentive Program and vary by “Stage.”  The EHR Incentive Program consists of Stages 1, 2 and 3 which represent set time periods during which providers must implement CEHRT to receive payments.  Each Stage has progressively more robust meaningful use objectives and clinical quality measures.  As a result, providers must continually update their EHR technology and quality assurance programs to receive payments under each Stage.

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A (Second) Lawsuit Seeks to Compel Statutory Timeframe for Administrative Law Judge Review of Medicare Claims Appeals

On August 26th, the Center for Medicare Advocacy filed a nationwide class action lawsuit against the Secretary of Health and Human Services. The complaint alleges that, as implemented, the Medicare administrative review process is in violation of Medicare statutory obligations and the Fifth Amendment’s Due Process Clause.[1]

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Is Apple Leading a Health Management Revolution?

September 9th was a significant day for Apple and its legions of loyal fans, but was it also the “beginning of a health revolution” as Apple alludes to?[1]  On September 9th, Apple announced its new iteration of the iPhone, the iPhone 6 running a new iOS 8 operating system, and also debuted its first wearable technology, the Apple Watch. The long awaited launch of these new devices also showcased software that Apple debuted earlier this year, Apple’s Health app and HealthKit platform which are integrated into the new operating system.

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$95 Billion Savings for Medicare – A New Forecast?

The New York Times in an August 27, 2014 article noted big changes to estimated Medicare spending in the latest Congressional Budget Office (CBO) report published last week.  The estimated Medicare budget for 2019 in this year’s report has declined by approximately $95 billion from the 2019 Medicare estimate published by the CBO four years ago in 2010.  As the newspaper analysis notes, that’s six straight years of downward Medicare budget estimate forecasts by the CBO.

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The True Meaning of “Save Money. Live Better” – Walmart Enters the Primary Care Market

As reported in the New York Times, Walmart has taken the plunge into the retail primary care healthcare delivery market.  Walmart has opened six primary care locations in South Carolina and Texas and plans to open another six by year end.  These primary care clinics are intended to offer a broader range of services than the approximately one hundred acute care clinics leased by hospital operators at Walmart locations across the country.  Walmart’s strategy is to include and focus on chronic disease management, especially in areas where doctors are scarce such as rural areas.

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Pennsylvania gets a green light to pursue Medicaid expansion under an alternative model

The Centers for Medicare and Medicaid Services (CMS) has approved Pennsylvania’s demonstration proposal to expand Medicaid to adults with incomes through 133 percent of the federal poverty line. The state is the 28th (including D.C.) to pursue Medicaid expansion, and one of a growing number of states to do so under an alternative model developed in collaboration with the federal government.

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Shifting to Value-Based Reimbursement

The Blue Cross Blue Shield Association released an interesting survey over the summer (July 2014) that provides further evidence of the change that is now happening in the American healthcare delivery system. BCBSA reported that approximately twenty percent (20%) of reimbursement from its Blue Cross Blue Shield plans were being paid in connection with a value-based arrangement. These arrangements included rewarding providers for improving quality of care and/or lowering healthcare costs.  That would mean that $1 of every $5 spent in healthcare reimbursements are performance-related.

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Nonprofit Hospital Revenue Growth Slows

For the second straight year in a row, nonprofit hospital expenses have increased more than revenue, according to a study of 383 hospital systems by Moody’s Investors Service released on August 27, 2014.  In an article published the same day by the New York Times, nonprofit hospital financial performance for 2013 was characterized as the worst since the Great Recession, with hospital revenue growth slowing to a nominal low in 2013 of 3.9 percent, rather than the more typical growth in prior years of at least seven percent per year.

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