Legal Insights and Perspectives for the Healthcare Industry

We had a really enjoyable Fast Break yesterday on a non-traditional health law topic: radioactive material regulation. As it turns out, nearly all hospitals and larger provider groups, particularly those doing imaging, oncology, or neurosurgery, routinely use or come into contact with regulated radioactive material. PET scans, for instance, which are operated by a significant number of hospitals, rely on radioactive isotopes as the basis of the imaging procedure. Morgan Lewis partner Lewis Csedrik and associate Roland Backhaus explained that providers are regulated by the Nuclear Regulatory Commission (NRC) and/or similar state-based agencies (called Agreement States). Each provider has to secure a specific license for use of radioactive materials, which entails designating a radiation safety officer and establishing a radiation safety plan.

In recent remarks, Assistant US Attorney General Brian A. Benczkowski emphasized that the US Department of Justice remains serious about fighting corporate fraud and corruption, and noted that transparency in its criteria for prosecution is a key tool for both DOJ and private sector companies. Stressing the importance of effective compliance programs, he noted that companies are more likely to implement such programs when it is clear what conduct DOJ will credit or penalize.

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The Centers for Medicare & Medicaid Services (CMS) published a proposed rule on March 4 to help patients more easily access their complete health information in interoperable forms across programs that CMS administers (the Interoperability Rule). In the rule’s preamble, CMS lays out a vision of an environment in which a patient’s health information can move seamlessly between health plans, providers, and post-acute care settings. CMS observes that while adoption of electronic health records (EHRs) by healthcare providers has been significant, progress on interoperability needs to be accelerated. The Interoperability Rule fact sheet is available here. While there are several new proposals and requests for information in the 71-page document, this post provides an overview of two of the Interoperability Rule’s proposals.

In case you’ve missed it, we’ve been running the Morgan Lewis Fast Break webinar series for more than two years now. The series examines a variety of different health law topics, from the old standards—Stark Law and Corporate Integrity Agreements, etc.—to topics on cutting-edge technology and legal developments such as Blockchain or our recent session on GDPR compliance. What we love about this series is that we get to highlight topics that may not be top of mind for many healthcare companies, helping listeners identify problems before they arise in their own practices or organizations. And as we explore these areas, we get to learn a lot as well.

The 116th Congress convened on January 3 with Democrats controlling the House for the first time since 2011 and Republicans maintaining their majority in the Senate. Divided government typically constrains Congress’s ability to pass broad, new legislative initiatives, while also limiting the scope of the legislation that does pass. Healthcare policy, especially, has been a point of partisan contention in the past. However, there are several areas where some degree of cooperation is possible in the 116th Congress and will likely impact the healthcare industry and health policy in 2019.

The Federal Bar Association's Qui Tam Section held a terrific two-day conference in Washington, DC, on February 28 and March 1, attended by over 200 False Claims Act (FCA) practitioners presenting government, defense, and relator perspectives on current FCA practice. Shout-out to our litigation partners Wendy West Feinstein and Rebecca Hillyer who participated on a panel discussing the FCA and opioids and other pharmaceutical products, and our colleagues Katie McDermott and Jonelle Saunders who attended the program.

US healthcare entities employing non-US nationals will want to keep abreast of important developments regarding the elimination of the H-4 spouse work authorization and the upcoming effective date for revised Form I-539 used by certain nonimmigrants—including H-4 and L-2 dependents—seeking to change their nonimmigrant status or extend their stay in the United States. Our global employment and immigration team breaks down what these changes mean and how these employees and their families may be impacted.

Read the full LawFlashes here and here.

There is an important pleading standard question being posed to the US Supreme Court in the petition for writ of certiorari by Intermountain Healthcare (IHC) in a False Claims Act (FCA) case filed by a whistleblower in 2012. The issue involves the pleading requirements under Federal Rule of Civil Procedure 9(b), which requires a plaintiff to plead fraud with particularity.

Chairman of the Senate Finance Committee, Senator Chuck Grassley, sent a letter on February 19 to the Internal Revenue Service (IRS) asking questions regarding IRS efforts to enforce Section 501(r) as it applies to tax-exempt hospitals. Section 501(r) requires a hospital to meet the following requirements in order to be tax-exempt: (1) conduct a community health assessment; (2) establish a financial assistance policy; (3) have limitations on charges for emergency or necessary medical care provided to individuals covered under a financial assistance policy; and (4) not engage in extraordinary billing and collection actions before determining if someone qualifies for its financial assistance policy. Mr. Grassley cited as reason for his concerns of noncompliance a 2017 article with statistics that large tax-exempt hospitals have decreased amounts of free charity care, while increasing total revenue.

CMS is expanding a national pilot program (the Value-Based Insurance Design Model, or VBID) that will allow Medicare Advantage (MA) plans for the first time to include hospice (end of life) coverage in plan designs. Since the inception of Medicare Part C, MA plans have “carved out” hospice care, leaving plan enrollees to receive end-of-life care under traditional Medicare Part A. Demonstrating the administration’s willingness to test innovative, value-based models to reduce cost, CMS is moving forward with a pilot that will allow eligible MA plans in all 50 states and territories that apply to the pilot to participate in various VBID programs—a significant expansion of the initial seven state VBID models that tested certain other VBID interventions (adding an additional three states in 2018).