What’s in the Bottle? FDA Announces New Blockchain Pilot Program for Tracking Drug Distribution

Where does my prescription come from? Has it been altered or diluted? Can I trust the label? With millions of prescriptions filled each year, quality control and security across the pharmaceutical supply chain seems like a herculean task. In an attempt to slay this proverbial hydra, the Food and Drug Administration (FDA) developed a new pilot program – the DSCSA Blockchain Interoperability Pilot (the “Blockchain Pilot”) – which aims to use blockchain to create a secure electronic, interoperable system that tracks and traces certain prescription drugs as they are distributed in the United States. Continue Reading

Unintended Consequences: Dynamex and California Health Care Employers

This article originally appeared in Healthcare News on August 6, 2019.

The California Supreme Court’s 2018 landmark decision, Dynamex Operations West, Inc. v. Superior Court (Dynamex), redefines the employment relationship between entities and workers in California and creates one of the most stringent standards in the United States for classifying workers as independent contractors.

Applying the changes introduced by Dynamex can present significant complications in many industries. This is especially true for the health care industry due to California’s prohibition of corporate practice of medicine (CPOM) and its associated rules. For example, the state requires hospitals to have physicians available during all hours of hospital operation, while, at the same time, generally prohibiting hospitals from hiring physicians directly.

Due to these complexities, many California health care entities may benefit from examining the potentially sweeping impacts of this new interpretation of the law and determining near- and long-term methods for making necessary changes to their hiring and retention policies. Following is an in-depth overview of the potential implications for health care employers and how those in the health care industry will likely need to respond. Continue Reading

Proposed and Expanded Disclosure Obligations for Hospitals Regarding not Only Gross Charges, but Third Party Payor Pricing as Well

On July 29, 2019, CMS released its proposed outpatient prospective payment system (“OPPS”) rule outlining a variety of changes it may implement for calendar year 2020. One proposal that has inspired immediate reactions from industry members would require hospitals to disclose certain additional pricing information, including some prices negotiated with third party payors, to the public. Continue Reading

CBO Report Shows Senate’s Bipartisan Bill on Surprise Billing, Drug Prices, Transparency, and More Would Result in Deficit Decrease

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

Is Prescription Drug Pricing The Cure For Partisanship?

In a rare act of bipartisanship, Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and Ranking Member Ron Wyden, D-Ore., introduced on July 23rd a chairman’s mark, the Prescription Drug Pricing Reduction Act (PDPRA) of 2019 (the “PDPRA” or “Mark”), to lower the price of prescription drugs for Americans. According to the Committee, the Congressional Budget Office (“CBO”) projects that the PDPRA would save taxpayers more than $100 billion in Medicare and Medicaid spending over 10 years, lower Medicare beneficiaries’ out-of-pocket costs by $27 billion and lower beneficiaries’ premiums by $5 billion. The bill passed out of committee by a 19-9 vote on July 25th.

Reaction to the Mark has been mixed. For example, the Pharmaceutical Research and Manufacturers of America criticized the PDPRA as the “wrong approach to lowering drug prices” and predicts it will “siphon” billions of dollars away from research and development without benefitting seniors at the pharmacy counter. America’s Health Insurance Plans was “encouraged” by the Committee’s work and expressed its readiness to work with Congress and the Administration. Continue Reading

The State of Washington Has Another Arrow in its Healthcare Antitrust Quiver: State Healthcare Antitrust Enforcement in the Spotlight

On May 7, 2019, The Governor of the State of Washington signed into law Substitute House Bill 1607 (“HB 1607”) – a first-of-its-kind premerger notification requirement covering healthcare transactions closing on or after January 1, 2020. HB 1607 is a timely reminder that state attorneys general have not hesitated in recent years to enforce both federal and their own state antitrust laws when a transaction poses local anticompetitive concerns. Continue Reading

SPOTLIGHT ON INNOVATION: Improving best practices for infection control at skilled nursing facilities

Skilled nursing facilities (SNFs) operate in a changing and challenging environment. The upcoming implementation by the Centers for Medicare & Medicaid Services (CMS) of a Patient Driven Payment Model will shift the reimbursement paradigm for SNFs from a focus on the volume of services provided to a focus on specific, clinically-relevant patient characteristics. Combining this significant change in reimbursement criteria with the challenges of low to non-existent profit margins, high employee churn, federal and state regulatory scrutiny and an active plaintiffs’ class action bar, means that in order to survive in today’s marketplace, SNFs must evolve their practices to maximize their operational efficiency and improve their bottom line. Continue Reading

CMS Proposes New Home Health Agency Rule Including Potential Changes to Reimbursement, Coverage, Quality, and More: CMS Accepting Comments until September 9, 2019

On July 11, 2019, the Centers for Medicare and Medicaid Services (“CMS”) announced a proposed rule for home health agency Medicare reimbursement that would increase payments by an aggregate 1.3% for 2020, amounting to $250 million. In doing so, CMS would begin a transition to payments that are value-based, implementing the Patient-Driven Groupings Model (“PDGM”), an alternate case-mix payment methodology. In the PDGM, home health agencies are paid for 30 rather than 60-day episodes of care, and reimbursement is based on patient characteristics rather than the number of therapy visits provided. In a statement from CMS administrator Seema Verma regarding the proposed rule, she said the PDGM will reward “value over volume.” The proposed changes to reimbursement also include a one-year phasing out of pre-payments for home health services, known as Requests for Anticipated Payment. These proposed changes reflect a significant shift in the manner in which home health agencies historically have been reimbursed. Continue Reading

What’s in the Bottle? FDA Announces New Blockchain Pilot Program for Tracking Drug Distribution

Where does my prescription come from? Has it been altered or diluted? Can I trust the label? With millions of prescriptions filled each year, quality control and security across the pharmaceutical supply chain seems like a herculean task. In an attempt to slay this proverbial hydra, the Food and Drug Administration (FDA) developed a new pilot program – the DSCSA Blockchain Interoperability Pilot (the “Blockchain Pilot”) – which aims to use blockchain to create a secure electronic, interoperable system that tracks and traces certain prescription drugs as they are distributed in the United States. 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

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

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