In a December 12, 2017 Advisory Board article, “The 340B drug pricing controversy, explained,” Scott Orwig wrote, “the 340B Drug Pricing Program is one of the most contentious issues in health care: Its critics say it ‘hurts patients’ and is being ‘abused’ by hospitals. Its defenders say it’s ‘vital’ to the health of low-income patients and essential to helping safety net hospitals care for their communities.”
Continue Reading Maneuvers on the 340B Drug Pricing Program Battlefield: Duplicate Discounts and Contract Pharmacies

In its decision, the Court concluded that UnitedHealth Group, Inc. (“United”) was not authorized to engage in “cross-plan offsetting.” What is cross-plan offsetting? It is a “self-help” practice that third party administrators (“TPAs”) of employer-funded health plans (“ERISA Plans”) engage in by offsetting alleged overpayments made to an out-of-network provider under one TPA-administered ERISA Plan by withholding payments to the same provider under a different TPA-administered ERISA Plan. Cross-plan offsetting is not an issue for in-network providers since most, if not all, in-network contracts include very specific definitions of what an overpayment is and how it may be resolved. However, for out-of-network providers, there is no contract in place and this often leads to disagreements about what should be considered an overpayment and how overpayments may be resolved. From the TPA’s perspective, cross-plan offsetting alleviates the need to wait for the resolution of an overpayment dispute to recapture overpayments made by the TPA to the provider. From the provider’s perspective, cross-plan offsetting is the TPA version of “robbing Peter to pay Paul.”

Sound complicated? Cross-plan offsetting is complicated! However, notwithstanding its complications, cross-plan offsetting is effective. In fact, it is so effective that on May 30, 2019, United filed a Petition for Writ of Certiorari asking the United States Supreme Court to overturn the Eighth Circuit’s decision and allow United and other TPAs to continue using cross-plan offsetting as a way to recover alleged overpayments.
Continue Reading Cross-Plan Offsetting in the Balance: UnitedHealth Group, Inc. Petitions the Supreme Court to Allow Cross-Plan Offsetting; Response to be Filed on or before July 31, 2019

Part C and Part D Quality Rating System

The November 1, 2018 proposed rule issued by the Centers for Medicare & Medicaid Services (“CMS”) includes enhancements and substantive changes to the Star Rating System in order to increase the stability and predictability of the Medicare Advantage program (aka “Part C”) and the Medicare Prescription Drug Benefit program (aka “Part D”) Star Ratings.

Measure Level Star Ratings.

CMS’ Star Ratings proposals are intended to eliminate some of the volatility and unpredictability of the calculation methodology, which is a welcome change for Medicare Advantage organizations (“MAOs”) and Part D plan sponsors. Based on stakeholder feedback and analyses of the data, CMS proposes two enhancements to the current hierarchical clustering methodology that is used to set cut points for non-Consumer Assessment of Healthcare Providers and Systems (“CAHPS”) measures:
Continue Reading Blog Series Part 7: CMS Proposed Rule on Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, Medicaid Fee-For-Service, and Medicaid Managed Care Programs for 2020 and 2021

“I can stop the deal if it is reasonably necessary to protect New Yorkers.”
Superintendent Maria Vullo of the New York State Department of Financial Services

During a public hearing in New York City on Thursday, October 18, 2018, New York State regulators, including Superintendent Maria Vullo of the New York State Department of Financial Services (“DFS”), threatened to block CVS Health’s $69 billion merger with health insurer Aetna if (i) CVS would not agree to hold the line on rising insurance premiums for Aetna’s member population in New York State (approximately 1.1 million New Yorkers across the State); and/or (ii) CVS Health refused to submit its CVS/Caremark pharmacy benefits manager (“PBM”) business to State regulation.
Continue Reading WHAT SAY YOU, NEW YORK? Now that Federal Antitrust Regulators Have Approved CVS’s Proposed Acquisition of Aetna, Attention Turns to New York State

A single, multidisciplinary entity, like a university, may include certain departments that use PHI, and other departments that do not. Such institutions are eligible to (and should) self-identify as “hybrid entities” to better manage HIPAA compliance risk.

The Health Insurance Portability and Accountability Act of 1996, as modified by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”) mandates privacy and security safeguards for information about an individual’s health status, care, or payment for care. Individuals, organizations, and agencies that meet the definition of a “covered entity” or “business associate” under HIPAA must comply with its requirements.
Continue Reading Are You a “Hybrid Entity” under the Health Insurance Portability and Accountability Act of 1996? The $4,348,000 Question

On July 17, 2018, the Court of Appeals for the D.C. Circuit upheld the D.C. District Court’s decision to dismiss the lawsuit led by the American Hospital Association, the Association of American Medical Colleges, and America’s Essential Hospitals challenging $1.6 billion in cuts to the 340B Drug Pricing Program. American Hospital Association, et al., v. Azar.
Continue Reading 340B Drug Pricing Program Litigation Update: American Hospital Association, Et Al. v. Azar

Kindred Healthcare. On July 2, 2018, Humana Inc. and private equity firms TPG Capital (TPG), and Welsh, Carson, Anderson & Stowe (Welsh) (collectively referred to as the Consortium) issued a press release announcing the closure of their $4.1 billion joint acquisition of Kindred Healthcare, Inc. Kindred Healthcare, Inc. is a national owner/operator of long-term acute care hospitals, inpatient rehabilitation facilities, rehabilitation service providers and, through Kindred at Home (KAH), home health agencies, hospices, telehealth providers, and community care facilities.
Continue Reading Humana, TPG Capital, and Welsh, Carson, Anderson & Stowe Create the Country’s Largest Hospice Provider, “Kindred at Home”

As previously discussed in our post from September 2017, the push for a response to the opioid crisis is gaining momentum. Enter the “Opioid Crisis Response Act of 2018.”

On May 7, 2018, the Opioid Crisis Response Act of 2018 (the “Bill”) was placed on the Senate Legislative Calendar after a unanimous vote out of the Senate Health, Education, Labor and Pensions Committee just weeks before on April 24. A showing of legislative commitment and intent, the Bill begins to tackle many of the key issues underlying and exacerbating the epidemic, though stakeholders remain concerned as to whether it goes far enough in light of the magnitude and complexity of the crisis.
Continue Reading In a Unanimous Vote, the Opioid Crisis Response Act of 2018 Makes it Onto the Legislative Calendar

Summer is almost here. For some, that means planning vacations to the beach, hitting the gym to shed that winter weight, or perhaps hitting the golf course—but for us at the Sheppard Mullin Healthcare Law Blog and the False Claims Act Defense Blog, summer signals the anniversary of the Supreme Court’s seminal decision in Universal Health Services, Inc. v. United States ex rel. Escobar
Continue Reading What Have We Learned About False Claims Act Litigation in the Two Years Since Universal Health Services, Inc. v. United States ex rel. Escobar? Quite a Lot, Actually