Part VIII: BCRA – What Is Dead May Never Die

In Part VII of our blog series, Very Opaque to Slightly Transparent: Shedding Light on the Future of Healthcare, we described the Better Care Reconciliation Act of 2017 (“BCRA”), the Senate GOP’s latest Obamacare repeal and replace legislation. While the Senate GOP leadership had hoped to vote on this bill as soon as this week, the sudden announcement on July 17th by Senators Mike Lee (R-UT) and Jerry Moran (R-KS) of their opposition to BCRA has effectively killed the legislation as written. With Senators Susan Collins (R-ME) and Rand Paul (R-KY) having previously voiced their refusal to support BCRA, the bill simply lacks sufficient votes to pass or even be voted on by the full Senate. In response to this development, Senate Majority Leader Mitch McConnell issued the following statement: Continue Reading

More Telemedicine Food for Thought: Exception Five to the Haight Act’s In-Person Examination Requirement

In our July 10, 2017 post regarding telemedicine prescribing, we wrote about the seven exceptions to the Haight Act’s requirement that a provider and patient have an-person visit before a prescriber/practitioner can prescribe a controlled substance for his/her patient. As we concluded in the post, the current exceptions are so narrowly focused that they are of limited utility to telemedicine providers and practitioners.

Notwithstanding the foregoing, it appears that one of the seven exceptions – Exception No. 5 – may be on the cusp of relevance to the telemedicine industry and to those telemedicine practitioners who are also prescribers under state licensure laws. Exception No. 5 allows a practitioner/prescriber to prescribe medication without a prior in-person examination if the “practice of telemedicine is being conducted by a practitioner who has obtained from the Administrator a special registration under section 311(h) of the Act (21 U.S.C. 831(h)).” The exception is currently unusable, however, since the DEA has not created any such registration provisions.

Expansion of Exception 5– or the addition of new exceptions through either regulation or legislation – has the potential of making it possible – under federal law – for prescribing practitioners to obtain a DEA “special registration” and, in turn, prescribe medications to patients whose initial examinations are conducted as “virtual visits” on a telemedicine platform. Notwithstanding the foregoing, once the DEA starts issuing special registrations, there will continue to be a potential impediment to telemedicine prescribing – those state laws (usually state healthcare licensing and scope-of-practice laws) that require initial in-person examinations as precursors to the issuance of prescriptions.

As described in our July 10, 2017 post, states are taking actions such that practitioner/prescribers in such states will have the ability under state laws to take advantage of federal action that will allow the DEA to develop and implement a federal “special registration” process. However, such states are in the minority as compared to those states that require pre-prescribing in-person patient examinations.

Because of the ongoing obstacles created by state laws that prohibit telemedicine prescribing, changes in the Haight Act and/or the Haight Act’s implementing regulations will only be a “first step” on the road to telemedicine prescribing. State legislative and regulatory action on the same subject will be the “second step.” As a result, the telemedicine lobby and other stakeholders will need to continue their efforts to influence lawmaking on both the federal level and the state level if their goals of telemedicine-based prescribing will be realized.

As seems to be a recurring refrain in any discussion regarding healthcare innovation and problem-solving, stay tuned. In fact, we will go one step further by saying stay tuned to the Sheppard Mullin Healthcare Law Blog.

Giving Telemedicine More Room to Breathe: Recent and Pending State and Federal Actions in the World of Online Prescribing

On October 18, 2008, the Ryan Haight Online Pharmacy Consumer Protection Act of 2008 (the “Haight Act”) came into law as the federal government’s first attempt to address the public health risks associated with online pharmacies – such risks including the dispensing of drugs (including addictive drugs to be used recreationally) without a valid prescription, and the dispensing of adulterated drugs, counterfeit drugs, and/or expired drugs, all of which could result in significant harm to individuals who may have been looking for an easy way to obtain prescribed medications at a lower price. Continue Reading

Part VII: The Senate’s Response to the American Health Care Act

Caveat: As of the date of this writing, there are indications that revisions to the Better Care Reconciliation Act of 2017 (“BCRA”) are in the works and may be issued as soon as Friday, June 30, 2017. If a revised BCRA is issued, there will be a new CBO report generated with respect to the revised bill. We will continue to watch the progress of the BCRA and, as a result, we will post to this blog additional blog posts regarding BCRA revisions, if any, and the BCRA’s advancement through the Senate, if any.

In Part VI of our blog series, Very Opaque to Slightly Transparent: Shedding Light on the Future of Healthcare, we outlined the “Macarthur Amendment” to the American Health Care Act (“AHCA”), which led to the bill’s narrow passage in the House on May 4, 2017. Almost 50 days later, on June 22, 2017, Senate Majority Leader Mitch McConnell released a “discussion draft” of the Senate’s response: the BCRA. While in large part similar to its House counterpart, there are some important changes, outlined below. Continue Reading

Exclusive Agreement Between Hospital and Insurance Plan Does Not Violate Section 1

The Seventh Circuit refused to revive an exclusive dealing claim by one hospital against its competitor because of an exclusivity agreement with an insurance plan. Judge Richard Posner wrote the short opinion strongly reiterating in the health insurance context the established principle that a competitor trying to attack vertical agreements under Section 1 of the Sherman Act will have an uphill struggle under the Rule of Reason. The case is Methodist Health Services Corp. v. OSF Healthcare System d/b/a Saint Francis Medical Center, No. 16-3791 (7th Cir. June 19, 2017). Continue Reading

When your Hospital-of-Choice is In-Network but, SURPRISE, your Anesthesiologist is Not: California’s AB-72 and Other State Responses to the Surprise Billing Pandemic

Regardless of a patient’s diligence in selecting an in-network hospital, ambulatory surgery center, or other health facility for treatment, patients are still being saddled with surprisingly high medical bills that include out-of-network rates which often dwarf the discounted in-network rates. These “Surprise Bills” occur when a patient receives treatment from an in-network facility but also receives treatment from an out-of-network physician (or other healthcare practitioner)[1] who provides services to in-network facility patients – consider an out-of-network anesthesiology group that is the exclusive physician of anesthesia services at an in-network hospital. Studies show that this and other similar scenarios are frequently played out across the Country. Continue Reading

The Enforcement Risks for Medicare Advantage Plans Continue: A New False Claims Act Settlement in Florida

Recent activities of the Department of Justice (“DOJ”) and Qui Tam whistleblowers reveal that Medicare Advantage Plans remain at the forefront of investigations for violations of the federal False Claim Act (“FCA”) for allegedly engaging in improper risk adjustment practices and other improper or fraudulent practices. In addition to the pending FCA enforcement cases in the Swoben and Poehling cases, as well as reports of ongoing federal investigations, the recent federal settlement in May in Florida with Freedom Health, Inc., and Optimum HealthCare, Inc. – both Medicare Advantage-participating managed care plans that are subsidiaries of America’s 1st Choice Holdings of Florida, LLC – demonstrates that the DOJ, the Office of the Inspector General of the United States Department of Health and Human Services (“OIG”) and Qui Tam whistleblowers are not only interested in large players, such as UnitedHealth Group and others, but also in smaller and regional Medicare Advantage organizations. Continue Reading

To Report or Not to Report – Is it Really A Question?

In a May 15, 2017 Bankruptcy Court decision (Gardens Decision) from California’s Central District (In re Gardens Regional Hospital and Medical Center, Inc. (Bankr. C.D.Cal., May 15, 2017, No. 1617463), Judge Ernest M. Robles wrote that the grant of oversight and approval authority given to California’s Attorney General over buy/sell and change-in-control transactions between nonprofit sellers of health facilities and for-profit buyers of health facilities (see, California Corporation Code Section 5914 (Section 5914)) is limited to those situations in which a nonprofit seller has an active California health facility license at the time of closing. As written by Judge Robles, the Gardens Decision concludes that transactions between nonprofit sellers and for-profit buyers fall outside the scope of Section 5914 if the assets at hand do not include an operating, California-licensed health facility. As a nonoperational, unlicensed health facility, the transaction at issue is not a health facility transaction subject to Section 5914 and, in turn, Attorney General oversight and approval. Continue Reading

WannaCry Ransomware Alert

This is not a drill.

Companies and law enforcement agencies around the world have been left scrambling after the world’s most prolific ransomware attack hit over 500,000 computers in 150 countries over a span of only 4 days. The ransomware – called WannaCry, WCry, WannaCrypt, or WannaDecryptor – infects vulnerable computers and encrypts all of the data. The owner or user of the computer is then faced with an ominous screen, displaying a countdown timer and demand that a ransom of $300 be paid in bitcoin before the owner can regain access to the encrypted data. The price demanded increases over time until the end of the countdown, when the files are permanently destroyed. Hospitals and healthcare entities in the UK and elsewhere were particularly hard hit and continue struggling to recover, with doctors around the world blocked from access to patient files and multiple emergency room and even entire-hospital shut-downs. To date, the total amount of ransom paid by companies is reported to be less than $60,000, indicating that companies are opting to let their files be destroyed and to rely instead on backups rather than pay the attackers. Nevertheless, the total disruption costs to businesses is expected to range from the hundreds of millions to the billions of dollars. Continue Reading

Medicare Advantage Plans Under Fire: The Department of Justice Files Complaints-in-Intervention

As reported in earlier blogs, the federal Department of Justice (DOJ) has been actively looking into potential abuses by Medicare Advantage (MA) Organizations as to allegedly improper risk adjustment claims submissions and practices. Earlier this month, and as had been anticipated, the DOJ filed complaints-in-intervention against UnitedHealth Group, Inc., and related Medicare Advantage entities, in two False Claims Act qui tam lawsuits in United States ex rel. James Swoben v. Secure Horizons, et. al., and United States ex rel. Benjamin Poehling v. UnitedHealth Group, Inc., et. al. Previously, the DOJ had announced its intent to intervene in both cases, as well as its intent to conduct “on-going investigations” of other potential defendants, including Health Net, Inc., Aetna, Inc., Bravo Health, Inc. (which is part of Cigna), and Humana, Inc. Continue Reading

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