CMS Unexpectedly Withdraws Three Proposed Rules

The Centers for Medicare and Medicaid Services (CMS) recently announced the withdrawal of three proposed rules that, in one case, had been pending since 2014. The first proposed rule that CMS decided to scrap was proposed in December of 2014 that would have ensured same-sex spouses were recognized and afforded equal rights as opposite-sex couples in Medicare and Medicaid participating facilities. The proposed rule was initiated to ensure that the Medicare conditions of participation and conditions of coverage were consistent with the U.S. Supreme Court decision in United States v. Windsor, which struck down a section of the Defense of Marriage Act that restricted the definition of marriage to between one man and one woman. Since publication of the proposed rule, CMS determined that the 2015 U.S. Supreme Court decision in Obergefell v. Hodges, which required states to license marriages between same-sex couples, addressed the concerns that CMS was attempting to correct via the proposed rule, and the proposed rule was no longer necessary.

The second withdrawn proposed rule would have introduced a new Medicare Part B drug payment model to test whether alternative payment structures would reduce Medicare expenditures. Under the proposed rule, CMS would have reduced the add-on to the Part B drug average sales price from six percent to 2.5 percent plus a flat fee. It would have also implemented a number of value-based purchasing tools that are used by commercial health plans, hospitals and others. In reviewing the comments received from the public, CMS determined that the program would be too complex and burdensome to administer.

Lastly, CMS withdrew a rule proposed earlier this year that would have outlined the qualifications for practitioners and suppliers to furnish and fabricate prosthetics and custom orthotics. The proposed rule would have also established accreditation requirements and requirements that an organization must meet to accredit suppliers to bill for such prosthetics and custom orthotics. CMS reasoned that the cost and time burdens would create hardships for providers and suppliers, particularly small businesses, and consequently, withdrew its proposal.

Ninth Circuit Denies Arbitration in a False Claims Act Case

On September 11, 2017, the Ninth Circuit in US and State of Nevada ex rel. Welch v. My Left Foot Children’s Therapy, LLC, upheld the denial of the defendant’s motion to compel arbitration in a False Claims Act (FCA) relator case, holding that an employee-relator’s FCA claims did not fall within the scope of the arbitration agreement with her former employer.  The FCA claims were based on allegations that the employer had filed fraudulent Medicaid claims.

The Court first looked to the Federal Arbitration Act (FAA) in determining that interpretation of the arbitration agreement would generally be a matter of state law.  Nevertheless, the Court also applied certain guiding principles of the FAA, including the rule as interpreted by the U.S. Supreme Court  that “’questions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration’” (quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)).

In issuing its ruling, however, the Court did not foreclose the potential for arbitration agreements to include FCA claims within their scope.

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FDA Issues Guidance on Hurricane Readiness for Medical Devices

The U.S. Food & Drug Administration (FDA) has issued important guidance on how to prepare for hurricanes when dependent on medical devices.  FDA stresses that during hurricanes and other emergency situations, medical devices may be exposed to fluctuating power, contaminants, or unusual levels of heat or humidity. The guidance links to pages providing information on the use of medical devices during and during emergency situations and afterwards, including:

 

HHS Issues Limited Waiver of HIPAA Sanctions Post-Hurricane Harvey

The U.S. Department of Health and Human Services (HHS) has used its authority to waive certain provisions of HIPAA in response to Hurricane Harvey.  HHS previously declared a public health emergency in Texas and Louisiana related to the hurricane and its aftermath.   Continue Reading

OIG Issues Advisory Opinion to Pharmacy

On September 7, 2017, the HHS Office of Inspector General (OIG) issued an Advisory Opinion to the owner of a retail pharmacy chain (Pharmacy) that would allow Federal health care program beneficiaries to participate in a paid membership program (Program).  The Program would include discounts and rebates on certain prescriptions and, where offered, on selected clinic services.

The Program was being offered previously to customers who satisfied certain eligibility criteria and paid an annual fee to join, but Federal program beneficiaries had not been permitted to enroll. In seeking the Advisory Opinion, the Pharmacy sought to modify the Program to extend it to Federal program beneficiaries as well. Continue Reading

CMS Proposes to Cancel EPM and CR Bundled Payment Programs and to Reduce Mandatory Participation in CJR Model

The Centers for Medicare and Medicaid Services (CMS) recently published a proposed rule (Proposed Rule) to scale back its mandatory bundled payment programs. Under the Proposed Rule, CMS would cancel the episode payment models (EPMs) and cardiac rehabilitation incentive payment model (CR), and it would also reduce the mandatory participation in the comprehensive care for joint replacement model (CJR). CMS stated that it believed the proposed changes are necessary because the continued mandatory participation in bundled payment models may impede CMS’s ability to engage providers in future, voluntary initiatives. CMS also stated that it anticipates testing future initiatives through applications and agreements with providers as opposed to additional rulemaking efforts. Continue Reading

No Right to Union Representation for Non-Mandatory Participation in Peer Review Proceedings – DC Circuit Court Overrules NLRB

Most states, including Connecticut and Massachusetts, have laws that allow hospitals and other health care institutions to establish confidential peer review programs to oversee the quality of care provided by their health care professionals without the threat those proceedings will be subject to discovery.  Menorah Medical Center (“Menorah”), in Kansas, had such a program for its nurses.  The Peer Review Committee (“Committee”) would investigate allegations of substandard care and, if substantiated, report the breach to the Kansas Board of Nursing. Continue Reading

House Bipartisan Act Would Amend Stark Law and Medicare Part B

On July 25, 2017, the U.S. House of Representatives passed by voice vote a bipartisan bill which is now in the Senate’s hands for consideration, the Medicare Part B Improvement Act of 2017. The bill would amend the Stark Law (Section 1877(h)(1) of the Social Security Act) and impact other provisions governing Medicare Part B.

The bill would amend the Stark Law:

  • to provide that the writing requirement for certain compensation arrangements may be satisfied by means determined by the HHS Secretary, including “a collection of documents, including contemporaneous documents evidencing the course of conduct between the parties;”
  • to include provisions for “indefinite” holdovers involving certain personal service arrangements and leases of office space or equipment; and
  • to provide for up to 90 days to obtain missing signatures in certain compensation arrangements that have become noncompliant.

These changes codify certain Stark Law changes previously made by the Centers for Medicare and Medicaid Services in the Medicare Physician Fee Schedule that took effect on January 1, 2016 (see related article here).  Continue Reading

OIG Settles EMTALA Allegations Involving Psychiatric Care

On June 2, 2017, AnMed Health and the Office of Inspector General (OIG) for the United States Department of Health and Human Services agreed to a $1.295 million settlement of allegations that AnMed had violated the Emergency Medical Treatment & Labor Act (EMTALA) (Section 1867 of the Social Security Act). The OIG alleged that AnMed failed to provide appropriate medical screening and stabilizing treatment to individuals presenting to the ED with unstable psychiatric emergency medical conditions. Continue Reading

Ninth Circuit Relies on Escobar to Revive False Claims Act Suit Against Pharmaceutical Manufacturer

On July 7, 2017, the U.S. Court of Appeals for the Ninth Circuit reversed a federal district court’s dismissal of a False Claims Act (FCA) whistleblower suit in United States ex rel. Campie v. Gilead Sciences, explaining that the district court did not have “the benefit of” the Supreme Court’s 2016 decision in Escobar at the time the suit was dismissed for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Continue Reading

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