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Erica Kraus is an associate in the Corporate Practice Group in the firm's Washington D.C. office.

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.

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.

Continue Reading 340B Drug Pricing Discount Program Update: HRSA Now Demands That Drug Manufacturers Provide 340B Discounts To Contract Pharmacies Amid Ongoing Litigation

On April 27, 2021, the Centers for Medicare and Medicaid Services (“CMS”) released the Hospital Inpatient Prospective Payment System (“IPPS”) and Long-Term Care Hospital (“LTCH”) unpublished Proposed Rule for 2022 (“Proposed Rule”). The Proposed Rule, if enacted, would eliminate the requirement from the Hospital IPPS and LTCH Final Rule for 2021 (“IPPS Final Rule for 2021”), as discussed in our September 11, 2020 blog post, that hospitals report the median payer-specific negotiated charge with Medicare Advantage (“MA”) payers, by MS-DRG, on its Medicare cost reports for cost reporting periods ending on or after January 1, 2021. CMS estimates that this will reduce the administrative burden on hospitals by approximately 64,000 hours.
Continue Reading CMS Proposes Repeal of Certain Cost Reporting Requirements from the IPPS Final Rule for 2021

On January 13, 2021, Brad Smith, the current (and fourth) director of the Center for Medicare and Medicaid Innovation (the “Center”), published an article[1] in the New England Journal of Medicine in which he evaluates the Center’s performance over its decade-long history against the Center’s stated goals – to decrease health care spending and improve health care quality.  Smith describes an underwhelming showing from the Center and puts forward several key lessons from the Center’s past performance as a way to inform and improve future performance.
Continue Reading Evaluation of Innovation Center Models

On December 11, 2020, five hospital groups, including the American Hospital Association (“AHA”), and an organization of hospital pharmacists representing participants in the 340B drug pricing program (“340B Program”), filed a federal lawsuit (the “340B Program Litigation”) against the U.S. Department of Health and Human Services (“HHS”) over HHS’ alleged failure to enforce 340B Program requirements that obligate pharmaceutical manufacturers to provide 340B Program prescription drug discounts to pharmacies contracted by 340B Program-participating hospitals to dispense 340B Program drugs.[1]
Continue Reading Contract Pharmacies and the 340B Drug Discount Program: New Litigation and an Advisory Opinion Point to Ongoing Skirmishes on the 340B Battlefield

In our November 25, 2000 Healthcare Law Blog article, “Big Changes for Health Care Fraud and Abuse: HHS Gifts Providers Updates to the Stark Law and the AKS, Just in Time for the Holidays,”  we discussed the advanced publication of two significant final rules intended to “modernize” and “clarify” regulations regarding the Physician Self-Referral Law (“Stark Law Final Rule”) and the Anti-Kickback Statute (“AKS Final Rule”) – both formally published on December 2, 2020 by the Centers for Medicare and Medicaid Services (“CMS”) and the Department of Health and Human Services, Office of Inspector General (“OIG”), respectively.
Continue Reading Analysis of OIG’s New and Revised Regulatory Safe Harbors to the Federal Health Care Program Anti-Kickback Statute and Beneficiary Inducement Prohibition

As mentioned in our November 25, 2000 Healthcare Law Blog article, “Big Changes for Health Care Fraud and Abuse: HHS Gifts Providers Updates to the Stark Law and the AKS, Just in Time for the Holidays,” the Centers for Medicare & Medicaid Services (CMS) published a final rule (“Final Rule”) on December 2, 2020 making significant changes to the regulatory framework implementing the federal physician self-referral prohibition (the “Stark Law”), 42 C.F.R. 411.351 et seq.
Continue Reading Critical Analysis and Practical Implications of CMS’ Changes to the Stark Law’s Implementing Regulations

As part of the “CY 2021 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Final Rule” (the “Final Rule”) published on December 2, 2020, the Centers for Medicare and Medicaid Services (“CMS”) finalized policies designed to overhaul the methodology used to calculate the Overall Hospital Quality Star Rating effective 2021.
Continue Reading New Criteria Established for the Overall Hospital Quality Star Rating

On November 20, 2020, the Centers for Medicare and Medicaid Services (“CMS”) and the Office of Inspector General (“OIG”) promulgated much-anticipated and significant final rules intended to “modernize” and “clarify” regulations regarding the Physician Self-Referral Law (“Stark Law Final Rule”) and the Anti-Kickback Statute (“AKS Final Rule”).  In the immediate future, Sheppard Mullin will post on this Healthcare Law Blog a comprehensive critical analysis of both the Stark Law Final Rule and the AKS Final Rule and their practical impacts.
Continue Reading Big Changes for Health Care Fraud and Abuse: HHS Gifts Providers Updates to the Stark Law and the AKS, Just in Time for the Holidays

On October 29, 2020, the Department of Health and Human Services (“HHS”), the Department of Labor, and the Department of the Treasury (collectively, the “Departments”) released the Transparency in Coverage Final Rules (the “Final Rules”), which require non-grandfathered group health plans and health insurance issuers offering non-grandfathered health insurance coverage in the individual and group markets to disclose certain information including negotiated rates with providers and estimated out-of-pocket expenses to enable consumers to make informed health care purchasing decisions.
Continue Reading Trump Administration Finalizes The Transparency in Coverage Rule

In a setback to hospitals challenging deep cuts to reimbursement for prescription drugs acquired through the 340B drug pricing program (“340B Program”), the U.S. Court of Appeals for the District of Columbia, on October 19, denied a request to reconsider a decision by three-judge panels of the Court upholding these cuts.  Short of a Supreme Court appeal, this decision effectively ends hospital challenges to these reimbursement reductions, and makes the implementation of additional cuts in 2021 a near inevitability.
Continue Reading The U.S. Court of Appeals Denies Rehearing on Cuts to 340B Drug Pricing Program