The Coronavirus Aid, Relief, and Economic Security (CARES) Act provided trillions in economic relief in response to the COVID-19 pandemic, including hundreds of billions of dollars in aid for the healthcare industry. Regulators in the healthcare industry have also adjusted regulations and procedures in response to the changing landscape caused by the pandemic. While the CARES Act and regulatory changes provides much-needed help, accepting funds and navigating the regulatory changes can add many legal pitfalls to an already cluttered regulatory scheme. As the government prepares to prosecute fraud and abuse by recipients of CARES Act funds, healthcare entities—the top payors of government enforcement and qui tam dollars—should take care to avoid claims of misconduct under CARES Act. Continue Reading
On May 18, 2020, California Senate Bill 977 (“SB-977”) was passed out of the California Senate Health Committee and is now scheduled for its first hearing before the Senate Appropriations Committee on June 1, 2020. SB-977 as written would subject all acquisitions and affiliations on and after January 1, 2021 by larger health systems, private equity funds and hedge funds of (i) hospitals, (ii) other health facilities, (iii) physicians, (iv) clinics, (v) ambulatory surgery centers or (vi) laboratories to prior approval by the California Attorney General. In its current form, SB-977 would require the California Attorney General to withhold his approval from a proposed transaction unless the transaction would (i) increase clinical integration and/or (ii) increase access or availability of healthcare services to underserved populations, and would not otherwise be anti-competitive. SB-977 would also give the Attorney General the discretion to hold a public hearing on a proposed transaction. In short, with SB-977, the California Legislature is going far beyond earlier proposals or legislation in other states – including Connecticut and Washington State – that have prior approval requirements for healthcare transactions.
In this article, we consider the forces behind SB-977 – a decade or more of healthcare consolidations and the financial distress being experienced by hospitals and other healthcare providers as a result of the current healthcare emergency – and the potential impact that SB-977 could have on the California healthcare marketplace if it were signed into law in its current form. Continue Reading
In 2012, the U.S. Supreme Court in NFIB v. Sebelius struck down a provision in the Patient Protection and Affordable Care Act (the “ACA”) which, for all intents and purposes, made the expansion of the Medicaid program voluntary for individual states. As a consequence, the Medicaid expansion provided for in the ACA has been rolled out in piecemeal fashion, with various states opting to expand Medicaid in the years since the ACA’s passage, and other so-called “holdout” states choosing to preserve their respective pre-ACA structured Medicaid programs. These holdout states tend to be more conservative and Republican-controlled, with governors and state legislatures opposed to the ACA’s Medicaid expansion for various political and economic reasons. The COVID-19 pandemic, however, seems to have prompted some of these “holdout” states, even considerably conservative states, to reconsider their decision not to expand Medicaid. Continue Reading
On April 27, Sheppard Mullin and Citrin Cooperman released a white paper entitled “Telehealth Development: Addressing the Current Need, While Strategically Position for the Future” addressing how federal and state regulators are promoting the expansion of telehealth. Healthcare organizations, of all types and sizes, are working to respond to the rapidly-changing regulatory environment. While there is uncertainty as to what extent these regulatory changes will remain in effect following the public health emergency period, it will be critical for all healthcare organizations to establish a strong foundation for a more permanent telehealth strategy after the crisis is over. Continue Reading
In recent years, there has been a trend towards the provision of cardiovascular procedures in the outpatient setting and particularly in ambulatory surgery centers (“ASCs”). This trend is in part motivated by the fact that outpatient cardiovascular services, in comparison to cardiovascular services performed on an inpatient basis, tend to be less expensive and offer greater comfort and convenience for patients.[i] As a result of the emphasis on outpatient cardiovascular services, there is growing interest in the development and expansion of cardiovascular programs in ASCs. Continue Reading
As discussed in a prior blog post, in order to manage the unprecedented medical need due to the COVID-19 pandemic, some states have loosened scope of practice restrictions imposed on healthcare professionals. The relaxing of these restrictions has enabled registered nurses, nurse practitioners, physician assistants, pharmacists and other health care professionals to provide certain medical services that are outside the scope of practice permitted under the practitioner’s license during the COVID-19 crisis. Continue Reading
As we discussed in our April 27, 2020 blog post, nursing homes have become the focus of significant attention during the COVID-19 crisis. In many respects, the attention is well deserved:
- Nursing homes traditionally serve seniors who often struggle with chronic health conditions. As a result, nursing home residents are particularly vulnerable to coronavirus infection due to both their age and health status;
- Nursing homes residents are highly interactive with each other. The close proximity of nursing home rooms/beds and the personal relationships often formed among nursing home residents make social distancing hard to maintain;
- In order to relieve pressure on hospitals that need to reserve their beds for the most acute COVID-19 patients, nursing homes are under significant pressure to accept COVID-19 patients who have been discharged from hospitals because they no longer require an acute level of care but still may be symptomatic and require isolation and treatment; and
- Most importantly, the above three factors and others have turned many nursing homes across the country into hot spots for coronavirus infection and, in some cases, COVID-19 fatalities. Overwhelming data as to the dangers found in nursing homes is highlighted in the blog article referenced above.
As the COVID-19 emergency continues to heavily impact the U.S. and its health care system, CMS has issued additional flexibilities for providers and payors seeking to respond to the pandemic. These new flexibilities are described both in revisions to CMS’ blanket waivers and in a new Interim Final Rule with comment period, both issued on April 30. Many of these flexibilities are responsive to questions and requests submitted to CMS over the past few weeks, providers’ experiences with developing and implementing pandemic response plans, and the regulatory obstacles they have encountered. While these new flexibilities will not eliminate all of the regulatory challenges currently facing providers responding to COVID-19, and providers must be careful to continue to track the scope of CMS’ flexibilities, they will be very helpful to many providers in their ongoing COVID-19 response efforts. In particular, and among other things, CMS’ new guidance expands flexibility for telehealth services, provides additional support for COVID-19 testing, relaxes additional regulatory requirements applicable to certain payors, provides other key regulatory flexibilities, and offers guidance to MSSP ACOs on payment calculations for periods affected by the public health emergency. Continue Reading
On Thursday, April 16, 2020, the California Department of Managed Health Care (the “Department”) released an all plan letter (the “Letter”) regarding changes to the Department’s General Licensure Regulation (the “Regulation”) in light of the coronavirus (COVID-19) pandemic. The Letter updated the Department’s previous guidance concerning the Regulation that was issued on June 13, 2019. For further information, see our previous post regarding the Regulation here. Continue Reading
The Supreme Court issued a long-awaited ruling on April 27, 2020, directed at a more than $12 billion challenge related to the temporary risk corridors program established by the Affordable Care Act (the “ACA”). Challenges were brought under multiple consolidated cases, Maine Community Health Options v. United States, Moda Health Plan v. United States, Land of Lincoln Mutual Health v. United States, and Blue Cross Blue Shield of North Carolina v. United States (the “Consolidated Cases”). In its decision, the Court reversed the decision of the United States Court of Appeals for the Federal Circuit and remanded the case for further proceedings. Continue Reading