On July 1, 2021, the California Department of Public Health (“CDPH”) issued new regulations[1] (the “Regulations”) effective immediately that more narrowly limit the circumstances under which instances of unauthorized access to medical information have to be reported to CDPH.  The new regulations also give CDPH more discretion to adjust penalties for violations.  The Regulations complement Section 1280.15 of the Health and Safety Code (“Section 1280.15”) requiring state-licensed clinics, health facilities, home health agencies, and hospices to prevent any unlawful or unauthorized access to, or use or disclosure of, a patient’s medical information, and to report any unauthorized access, use or disclosure to the Department no later than fifteen (15) business days after the breach was detected.
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Continue Reading California Issues New Health Facility Breach Reporting Requirements

On July 13, 2021, the Centers for Medicare & Medicaid Services (“CMS”) unveiled a proposal to temporarily extend Medicare coverage for particular telehealth services granted during the COVID-19 public health emergency (the “Pandemic”), in order to evaluate which services should be covered permanently. Through the 2022 Physician Fee Schedule (“PFS”), CMS is allowing certain services to remain on the telehealth list until the end of December 31, 2023.
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Continue Reading CMS’ Proposal to Expand Telehealth Coverage

On July 16, 2021, Governor Newsom signed California Assembly Bill 150 into law, allowing certain owners of passthrough entities to find a way around the current $10,000 federal cap on state and local tax (SALT) deductions for individuals.  The new law, applicable to tax years beginning on or after January 1, 2021 and ending before January 1, 2026, allows for many partnerships, limited liability companies taxed as partnerships, and S-Corporations to pay an entity level tax based on electing individual owners’ share of income, and then grants the owners a credit against California personal income tax for the full amount of tax paid at the entity level on their distributive share of California taxable income.
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Continue Reading California Passes “Workaround” To Federal Limit on State Tax Deduction For Certain Owners of Pass-Through Entities

The public health crisis (the “Pandemic”) brought more attention, and more money, to the use of digital technologies to provide remote services to millions of individuals affected by the Pandemic. The use of digital technologies to provide medical services otherwise known as “telehealth”, exploded during the Pandemic but has since then made a steady growth across the healthcare industry, with many realizing the value of using digital technology to supplement, and in some cases, replace traditional methods of medical care. While many expected the value and investment in telehealth to decline with Pandemic restrictions being lifted, a recent report from venture firm Rock Health (the “Report”), shows that digital health funding continues to break records as venture-backed companies raised $14.7 billion in the first half of the year. Rock Health’s CEO Bill Evans notes that while even he was a bit surprised by the increase, the fundamentals checked out, “we saw pace increase and size per round increase,” noted Evans.
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Continue Reading Telehealth Investment and Telehealth Utilization: Let’s Look at the Numbers

On July 13, 2021, the Centers for Medicare and Medicaid Services (“CMS”) released a Proposed Rule that proposes to amend certain regulations implementing the Physician Self-Referral Law, otherwise known as the “Stark Law”. The Proposed Rule proposes to revise once again the definition of “indirect compensation arrangement” (ICA), effectively to revert the meaning of the definition back – for the vast majority of indirect financial relationships between DHS entities and referring physicians – to the definition of that term as it was in place prior to the latest Stark Law rulemaking, “Modernizing and Clarifying the Physician Self-Referral Regulations” (the “MCR Final Rule”), published on December 2, 2020.[1]  The Proposed Rule also proposes to define the term “unit” and the phrase “services that are personally performed”, both for purposes of the ICA definition.
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Continue Reading CMS Proposes to Revise, Again, the Stark Law’s Definition of “Indirect Compensation Arrangement”: What Was Old is New Again

On June 23, 2021, Delaware Governor John Carney signed House Bill 160, the Telehealth Access Preservation and Modernization Act of 2021 (the “Bill” or “HB160”) which continues and enhances Delaware residents’ access to telehealth services and, through the adoption of the Interstate Medical Licensure Compact (the “Compact”), ensures that telehealth services can be provided through qualified medical practitioners in a streamlined and efficient pathway to licensure that, according to the Bill’s supporters, meets the health care delivery system needs of the 21st century.
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Continue Reading The “State” of Telehealth: Delaware Expands Access to Telehealth

In July 2020, we discussed a ruling by the D.C. Court of Appeals upholding the Department of Health and Human Services’ (HHS) site-neutral payment rules. On Monday, June 28, 2021, the Supreme Court declined, without comment, to hear an appeal from the American Hospital Association (AHA) and other provider groups asking it to reverse this ruling.
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Continue Reading Site-Neutral Payments Stand: SCOTUS Declines to Hear AHA Appeal, Preserving Lower Payments to Off-Campus Provider-Based Departments

Now approaching a year-long battle, drug manufacturers and 340B covered entities, which include hospitals and community health centers, participating in the 340B Drug Pricing Discount Program (“340B Participants”) continue to dispute the issue of whether drug manufacturers are required to give 340B Participants discounts on drugs dispensed through contract pharmacies.  The most recent point of contention involves the U.S. Health Resources and Services Administration’s (“HRSA”) May 17, 2021 letters sent to six drug manufacturers stating that the manufacturers’ actions to limit access to 340B Program pricing for 340B Participants who dispense drugs through contract pharmacies is in direct violation of Section 340B of the Public Health Service Act (also referred to as the “340B Statute”).  The letters also included HRSA’s demand that the manufacturers immediately begin offering their drugs at discounted prices to these 340B Participants as well as credit or refund all 340B Participants for overcharges that resulted from the limiting policies, or be subject to civil monetary penalties.  As anticipated, certain drug manufacturers, including Eli Lilly, have filed motions in federal court to stop the HRSA from placing monetary penalties based on their refusal to provide 340B discounts to contract pharmacies.
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Continue Reading 340B Drug Pricing Discount Program Update: HRSA Now Demands That Drug Manufacturers Provide 340B Discounts To Contract Pharmacies Amid Ongoing Litigation

In its June 2021 physician supply and demand report, “The Complexities of Physician Supply and Demand: Projections From 2019 to 2034” (the “Report”), the Association of American Medical Colleges (“AAMC”) highlights the ongoing concern of physician shortages in the United States.  According to the Report, the U.S. faces a potential physician shortage of between 37,800 to 124,000 doctors by 2034. While an improvement from AAMC’s June 2020 report, the COVID-19 pandemic highlighted the consequences of failing to address this problem, as medical schools and teaching hospitals were forced to graduate medical students early, and hospitals scrambled to call up retired physicians and to pay steep travel and relocation rates, all to address the public health emergency.…
Continue Reading Congressional Action in the Face of Mounting Concerns Regarding Current and Future Physician Shortages

On June 17, 2021, the Supreme Court of the United States issued its opinion in California v. Texas (No. 19-840) and Texas v. California (No. 19-1019), holding 7-2 (Justice Breyer, joined by Chief Justice Roberts, and Justices Thomas (concurring), Sotomayor, Kagan, Kavanaugh, and Barrett; Justice Alito, dissenting, joined by Justice Gorsuch) that neither the individual plaintiffs nor the states had standing to challenge the constitutionality of the Affordable Care Act’s (ACA) minimum essential coverage provision because none of them sustained any injury in fact.…
Continue Reading Not with a Bang, But a Whimper—Supreme Court Kicks Latest ACA Challenge for Lack of Standing

On June 1, 2021, the Oregon Governor, Kate Brown, signed House Bill 2508A (“HB2508A” or the “Bill”) which, among other things, requires parity for healthcare services delivered through telehealth, upon satisfaction of certain criteria. The Bill expands coverage of and reimbursement for telehealth services in Oregon, promoting equitable and safe access to care.…
Continue Reading The “State” of Telehealth: Oregon Looks to Provide Parity for Telehealth