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Kathleen M. Stratton is Special Counsel in the Corporate Practice Group in the firm’s Washington D.C. office.

On August 10, 2021, the Centers for Medicare and Medicaid (“CMS”) published a proposed rule (“Proposed Rule”) to rescind the Most Favored Nation Model (“MFN Model”) interim final rule that was published on November 26, 2020 (“Interim Final Rule”).  As described in our December 2020 blog post, the Interim Final Rule established a seven-year nationwide, mandatory MFN Model that would test an alternative way for Medicare to pay for certain Medicare Part B single source drugs and biologicals.  The MFN Model, originally set to begin January 1, 2021, would have tied the prices for certain Part B single-source drugs and biologics to the average price paid by several overseas countries and remove incentives to use higher cost drugs, in order to determine whether this could “control unsustainable growth in Medicare Part B spending without adversely affecting quality of care for beneficiaries.”  Had the Interim Final Rule been implemented, Medicare Part B reimbursement would have been significantly reduced starting January 1, 2021.

Continue Reading Executive Order on Promoting Competition in the American Economy: The Biden Administration Considers Drug Pricing Strategies While Keeping the “Most Favored Nations” Drug Reimbursement Program on the Sidelines

On September 13, 2020, President Trump issued an Executive Order (the “Executive Order”) directing the Department of Health and Human Services (“HHS”) to issue regulations instituting two most-favored-nations (“MFN”) payment
Continue Reading Medicare Part B Most Favored Nation Drug Pricing Model: New Rules, New Lawsuits, New Tweets

On September 2, 2020, the Centers for Medicare and Medicaid Services (“CMS”) filed the unpublished version of the forthcoming Inpatient Prospective Payment Systems (“IPPS”) Final Rule for 2021. One of the more controversial provisions in the IPPS Final Rule finalizes CMS’ proposal, with modification, to require hospitals to report certain market-based payment rate information on their Medicare cost report for cost reporting periods ending on or after January 1, 2021. Specifically, this includes requiring hospitals to report on the Medicare cost report, the median payer-specific charge that the hospital has negotiated with all of its Medicare Advantage organization (“MAO”) payers, by Medicare Severity Diagnosis Related Groups (“MS-DRGs”) (the classification system by which hospitals are paid for patients’ hospital stays). The payer-specific negotiated charges used by hospitals to calculate these medians would be the payer-specific negotiated charges for service packages that hospitals are already required to make public under the requirements finalized in the Hospital Price Transparency Final Rule and, therefore, CMS argues that “the additional calculation and reporting of the median payer-specific negotiated charge will be less burdensome for hospitals.” In addition, CMS also finalized the market-based MS-DRG relative weight methodology, which incorporates this market-based rate information, to inform its calculations for inpatient hospital rates beginning in 2024.

Continue Reading CMS Finalizes Medicare Advantage Price Transparency Requirements, Despite Industry Criticism

On Friday, March 27, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted.  Organized below are concise summaries of select CARES Act sections that will impact various sectors of the health care industry:
Continue Reading Key Health Care Provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”)

As discussed in our December 13, 2019 blog post on Surprise Billing, states have taken the lead on protecting patients against surprise bills, as the numerous pending bills before the House on the issue have stalled. Now in 2020, two new state surprise billing laws in Texas and the State of Washington have gone into effect, while Congress is trying anew to make something happen on the federal level.
Continue Reading An Update: Despite Resistance, Surprise Billing Restrictions See Continued Legislative Activity

“Surprise billing,” also known as “balance billing,” is one of few areas that garners bipartisan support. Surprise billing occurs when a patient inadvertently goes out of his or her insurer’s network, resulting in a “surprise bill” – often times when they had no choice in the matter. According to a recent analysis of 2017 national claims data by the Health Care Cost Institute, an independent, nonprofit research organization, emergency medicine specialists are the most likely to generate surprise bills. How does this play out? A patient goes to the emergency room at a hospital that is in-network, only to be provided services by a doctor staffing that emergency room who is out-of-network, with the patient having no idea about this billing dichotomy and no means to stop it.
Continue Reading Surprise Billing Initiatives Face Not-So-Surprising Resistance

On October 9, 2019, the Department of Health and Human Services (“HHS”) Centers for Medicare and Medicaid Services (“CMS”) and Office of Inspector General (“OIG”) released proposed rules in conjunction with HHS’ “Regulatory Sprint to Coordinated Care.” The Regulatory Sprint to Coordinated Care “aims to remove potential regulatory barriers to care coordination and value-based care created by four key Federal health care laws and associated regulations: (1) the physician self-referral law [(“Stark Law”)]; (2) the anti-kickback statute [(“AKS”)]; the Health Insurance Portability and Accountability Act of 1996 [(“HIPAA”)]; and (4) the rules… related to opioid and substance use disorder treatment.”
Continue Reading CMS and OIG Propose Regulatory Changes Impacting the Scope of the Stark Law and the Federal Health Care Program Anti-Kickback Statute

A 2016 Final Rule from CMS created a new regulatory requirement for long-term care facilities, 42 C.F.R. § 483.85, that mandates such facilities have in operation, by November 28, 2019, a compliance and ethics program that is “reasonably designed to be effective in preventing and detecting criminal, civil, and administrative violations under the [Social Security] Act and in promoting quality of care.” The following eight components of a compliance and ethics program are required for all long-term care facilities’ operating organizations:
Continue Reading Long-Term Care Providers and Corporate Compliance Programs: The Impending November 28, 2019 Deadline is Fast Approaching

On July 16, 2019, the Congressional Budget Office (“CBO”) released a Cost Estimate for Senate Bill S. 1895, the “Lower Health Care Costs Act.” The bipartisan bill, introduced June 19, 2019, intends to end surprise medical bills, reduce the prices of prescription drugs, improve transparency in health care costs, and increase public health awareness and access to health information.
Continue Reading CBO Report Shows Senate’s Bipartisan Bill on Surprise Billing, Drug Prices, Transparency, and More Would Result in Deficit Decrease