Legal Insights and Perspectives for the Healthcare Industry

Healthcare partners Al Shay and Howard Young and associate Jake Harper recently contributed to the Health Care Compliance Legal Issues Manual, a publication by the American Health Lawyers Association (AHLA).

The latest edition of AHLA’s Health Care Compliance Legal Issues Manual gives readers an up-to-date look at issues critical to healthcare compliance, including tips for conducting internal investigations; audit basics; overviews of the False Claims Act, Stark Law, and Anti-Kickback Statute; healthcare privacy; and more.

The US government continues its focus on healthcare fraud through criminal actions. It has demonstrated its willingness to pursue physicians and investors alike and to take creative approaches in order to secure convictions. When it comes to alleged healthcare fraud, the government not only focuses on fraud in connection with government payers, but also uses the statutes in its arsenal to target purported fraud against private payers.

The US Supreme Court issued its decision on May 13 in Cochise Consultancy v. United States ex rel Hunt, unanimously holding that the three-year tolling provision in 31 U.S.C. 3731 (b)(2) applies in favor of relators in declined FCA cases. This decision resolves a three-way split in the circuits on whether relators may have up to 10 years to pursue allegations in declined whistleblower cases.

CMS finalized a rule last month that will significantly expand access to telehealth services for patients in Medicare Advantage plans. Implementing provisions of the Bipartisan Budget Act of 2018 (BiBA), the new rule will allow patients to (finally) receive healthcare services from the comfort of their homes. According to CMS Administrator Seema Verma, “With these new telehealth benefits, Medicare Advantage enrollees will be able to access the latest technology and have greater access to telehealth.”

In a month better known for inclement weather, practical jokes, and decorated eggs, Health Law Scan opted to celebrate “Drop Everything and Read Day” on April 12. As March turned to April, we evaluated the fault lines, tradeoffs, and potential for disruption in Medicare for All, a topic that received its first hearing in Congress this week. Moving on with April, the US Senate renewed its pressure on physician-owned distributorship arrangements, the OMB expanded regulatory actions subject to prepublication review, the HHS Inspector General resigned after 15 years at the helm, and Maryland became the first state to pass legislation creating a Prescription Drug Affordability Board.

So if you missed any of our blog posts, including our new “Tele-Health Tuesdays” feature by Jake Harper and tips by Reece Hirsh on how to prevent and respond to healthcare data breaches, it’s never a problem because we have it all right here for you!

DOJ’s enforcement policy for the False Claims Act (FCA) has largely been static for 30 years or maybe since the forgotten 1998 Holder memo that set out guidelines to assure the FCA was not recklessly deployed for provider billing mistakes. In the last year or so, however, the policy guidance has been astonishing, insightful, and suggests a new attitude is afoot. First, we had the popularly described “Granston Memo” in 2018 on the criteria for seeking dismissal of declined whistleblower suits, which is now part of the Justice Manual and, in fact, there has been an increase in DOJ dismissals as there should be in this practice area.

Clearing the way for consideration by the US House of Representatives, the Ways and Means Committee has unanimously approved bipartisan legislation aimed at increasing drug price transparency by manufacturers and pharmacy benefit managers through enhanced reporting and accountability requirements.

In a rare show of bipartisanship, the House Ways and Means Committee recently approved HR 2113, the Prescription Drug Sunshine, Transparency, Accountability and Reporting Act of 2019 (STAR Act) by a 40-0 vote. The STAR Act is the consolidated product of four House bills aimed at bringing transparency to drug price hikes and high launch prices, required reporting of product samples under the Physician Payments Sunshine Act (Sunshine Act), accountability by pharmaceutical benefits managers (PBMs), and accurate drug price reporting to the Medicare program. Key highlights of the legislative proposal follow below.

We had a successful Fast Break on HealthTech Startups last month. The program, led by Morgan Lewis corporate partners Andy Ray (@AMRayEsq) and Jeff Bodle (@jeffbodle), explored a lot of the things that might affect the relationship between capital investors, including corporate venture capital and startup entrepreneurs. We discussed a bit about the background of how a startup begins and explored the process through which a successful startup begins to obtain capital, especially when integrating vertically with potential buyers of their products (not just their business). This Fast Break also touched on some of the common healthcare regulatory issues we have to contend with on both the startup and the corporate side during diligence. If you’d like to take a listen, here is a recording of the program.

A handful of bills that comprised a healthcare reform package championed by Florida House Republicans are on their way to the governor’s desk where they’ll likely be signed into law. The result of an ambitious effort by lawmakers to overhaul how Florida regulates healthcare, the bills represent a striking departure from the current regulatory environment. Passed during the last week of the legislative session with a July 1, 2019, general effective date, providers will want to begin reviewing their policies in anticipation of the coming change.

In its updated guidance issued on Tuesday, the US Department of Justice Criminal Division places effectiveness at the epicenter of its factors to be utilized when evaluating a company’s compliance program in the context of a criminal investigation.

The US Department of Justice (DOJ) published updated guidance on April 30 on factors prosecutors should consider when analyzing the effectiveness of a corporate compliance program to prevent or detect fraud and other misconduct. The “Evaluation of Corporate Compliance Programs” updates guidance previously released on February 8, 2017, and provides companies with increased clarity on the government’s evaluation of corporate compliance programs.

This is the first formal guidance issued by the DOJ’s Fraud Section since the confirmation of the new US Attorney General.

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