Texas Telemedicine Saga Finally Over? The Texas Medical Board Substantially Revises Telemedicine Regulations

The Texas Medical Board’s (the “Board”) adoption of new telehealth licensing regulations may finally put to bed long-running challenges to the state’s historically rigid position with respect to healthcare services delivered remotely via telemedicine.  As we previously reported, the Board had been embroiled in a legal dispute with Teladoc, a large, nationwide telehealth company, involving antitrust challenges and an injunction against the Board’s enforcement of its in-person examination requirement, discussed below.  The ongoing battle prompted action by the Texas legislature to enact statutory changes (Senate Bill 1107 passed last May) to eliminate the requirement that Texas physicians must conduct an in-person visit prior to issuing a prescription.  These new regulations were issued in response to the statutory change.

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CVS Health to Acquire Aetna

On December 3, 2017, CVS Health, a giant in the retail pharmacy industry, announced plans to acquire Aetna. Aetna is one of the largest medical insurers in the nation, servicing approximately 46.7 million people. Under the proposed framework, CVS will acquire all of the outstanding shares of Aetna through a combination of cash and stock – $145.00 and 0.8378 of its own shares for each share of Aetna. After the transaction is complete, Aetna shareholders will own about 22% of the combined entity. The announced acquisition is expected to close in the second half of 2018, if it receives the requisite approvals from shareholders and regulators.

As more information becomes publicly available, another blog will be posted to further analyze the proposed acquisition.

*Cody Fierro is a Law Clerk in the Corporate Practice Group at Sheppard Mullin.

Tax-Exempt Healthcare Organizations Brace for Impact as Senate Tax Reform Bill Passes

Update. We described in a previous blog post major changes that tax-exempt hospitals and other tax-exempt organizations in the healthcare industry face in the tax reform proposals working their way through Congress. In the early hours of Saturday, December 2, 2017, the Senate narrowly passed its tax reform bill. Although the Senate’s bill has much in common with the bill passed by the House of Representatives, there are significant differences. Accordingly, the House voted yesterday, December 4, 2017, to proceed with a conference committee to reconcile the two bills. A reconciled bill would still need to be approved by both the House and Senate. The Republicans are pushing hard to enact a final bill before year end. Continue Reading

Escobar: Year One

The healthcare industry is exposed to False Claims Act liability more so than other industries because of the federal government’s unique role as both a regulator and payor. Universal Health Services, Inc. v. United States ex rel. Escobar is a game changing decision for those in the healthcare industry because it makes violations of certain regulations potential bases for liability under the False Claims Act. Indeed, Escobar itself was a case about a facility that allegedly violated Massachusetts Medicaid regulations requiring mental health facility staff to have certain qualifications. Since Escobar, we have seen numerous cases brought against healthcare entities based on an implied certification theory. Although it seems that Relators and the Government continue to push the boundaries to find new avenues to liability, the decisions are uniformly enforcing what the Supreme Court described as a “rigorous” materiality requirement. This materiality requirement is governed by several principles described in the Escobar decision. Earlier this summer, to mark the one-year anniversary of the Escobar decision, our team prepared a handy desk reference describing those principles, which we would encourage you to download by clicking here.

MACRA Quality Payment Program Final Rule: Implications for 2018 and Beyond

On November 2, 2017, CMS published its final rule (the “Final Rule”) on the 2018 Quality Payment Program (“QPP”), authorized by the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”). This final rule adopted many of the proposals put forward by CMS in its June 2017 proposed rule, summarized here. But the final rule is not merely a rehash of the proposed rule, and there are several features that may have important implications that should be on practitioners’ immediate radar. These include: Continue Reading

Change in Policy or Same Old Story? DOJ Suggests it Will Dismiss Unmeritorious Qui Tam Suits

An early report from the Health Care Compliance Association’s Health Care Enforcement Compliance Institute states that DOJ will be moving to dismiss False Claims Act cases that it concludes lack merit. DOJ has not yet posted the speech on its website but RACmonitor, an online news and information source for healthcare providers, reports that:

In announcing a significant policy change, the U.S. Department of Justice (DOJ) said that when it concludes that a qui tam case lacks merit, it will file a motion to dismiss the case rather than allowing the relator to continue.

The surprise announcement was made by Michael Granston, director of the commercial litigation branch of the fraud section in the DOJ’s civil division, during the Health Care Compliance Association’s Health Care Enforcement Compliance Institute in Washington, D.C. on Monday. Continue Reading

The 340B Drug Pricing Program: New CMS Final Rule Draws a Motion for Preliminary Injunction from Hospital Groups

On November 13, 2017, the Centers for Medicare & Medicaid Services (CMS) issued the final rule, “Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs” (“Final Rule”). The Final Rule, in addition to the usual collection of annual Medicare payment updates and adjustments for the coming year, includes provisions that substantially lower reimbursements for hospitals that purchase prescription medications under the 340B Drug Pricing Program (the “340B Program”). Continue Reading

Tax-Exempt Hospitals & Other Tax-Exempt Healthcare Organizations Not Immune from Federal Tax Reform

As federal tax reform efforts proceed rapidly in both chambers of Congress, tax-exempt hospitals and other tax-exempt healthcare organizations are facing major potential changes. New tax burdens on tax-exempt organizations are among the ways in which the bills would raise revenue to pay for proposed tax cuts for businesses and individuals. Importantly, it is still early in the legislative process, and much may change as Republicans race to have a bill signed into law before the end of the year. Continue Reading

Clean Up on Aisle 12! The Obamacare Pop-Up Store is Open but Stocks are Limited

The fifth Open Enrollment period under the Affordable Care Act (ACA) started on November 1st, and will continue for a scant 45 days ending on December 15, 2017. This year, not only has the Open Enrollment been cut in half, but obstacles abound – obstacles that were not part of the 2016 Open Enrollment Period. For example:

  • Healthcare.gov is undergoing maintenance that could interfere with access during the Open Enrollment Period;
  • Federal support for Open Enrollment outreach and advertising is substantially lower this year than it has been in prior Open Enrollment periods; and
  • The number of health insurers participating in the exchanges has dropped significantly from last year (prompted in part by well-founded concerns regarding the future of federal cost-sharing reduction (CSR) payments), and in some counties, only one plan is available to individuals and families seeking coverage through the exchanges.

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Recent Merger Reflects Enhanced Need for Revenue Cycle Management Platforms

Two of the nation’s most noteworthy companies in the Revenue Cycle Management (“RCM”) technology space, Navicure Inc., and ZirMed Inc., announced a merger on September 14, 2017.

Navicure is a medical claims management, patient payment and data analytics company and ZirMed is known for its predictive analytics technology that helps healthcare organizations capture more revenue. The parties have announced that Navicure will purchase ZirMed and the transaction is expected to close by the end of this year. Continue Reading

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