Health Law Scan
The Centers for Medicare & Medicaid Services (CMS) unveiled the Healthy Adult Opportunity initiative on January 30. Morgan Lewis partner Susan Feigin Harris recently spoke with Fierce Healthcare about the CMS block grant, and specifically discussed the possibility of the program seeing a challenge in court. “It is a classic constitutional case of who gets to allocate funding and who gets to stop allocating funding and that is Congress,” she said.
Legal Insights and Perspectives for the Healthcare Industry
In this LawFlash, our antitrust and competition team details increased jurisdictional and filing fee thresholds under the Hart-Scott-Rodino Act announced by the Federal Trade Commission (FTC) on January 28. Healthcare entities contemplating mergers, acquisitions, or other transactions that might require premerger notification should review the new thresholds, which apply to transactions closing on or after February 27, 2020.
While US healthcare institutions are poised to respond to any outbreak of the 2019 Novel Coronavirus (2019-nCoV), how should they prepare as employers for the questions and compliance challenges that arise in a public health crisis? In this LawFlash, our Labor, Employment, and Benefits team cautions that “employers must carefully balance concerns relating to employee and public safety with protecting employees from unnecessary medical inquiries, harassment, and discrimination—all while complying with immigration, leave, and medical privacy laws.” Recommending that “[r]esponsibility should be assigned to specific individuals or teams to assess the hazard, communicate with employees and the public, and implement appropriate security measures,” they detail important information that employers should know before responding to an outbreak situation.
Check out our Responding to the 2019 Novel Coronavirus page for all of the latest developments.
The US Department of Justice (DOJ) Antitrust Division issued a Business Review Letter (BRL) on January 15 in response to a proposal by the American Optometric Association (AOA) and AOAExcel GPO, LLC to expand their group purchasing arrangement. The AOA includes approximately 27,000 doctors of optometry (plus optometry staff and students) who compete with one another and nonmember optometrists and ophthalmologists to provide optometric services. AOA members also compete with other retail and online stores and vertically integrated providers who offer optometric products. In an effort to help their members better compete with these online and retail stores and vertically integrated manufacturers, the parties plan to expand their group purchasing arrangement to include optometric products for resale to customers. The proposed expansion would cover optometric products including eyeglass lenses and frames and contact lenses. The DOJ, in reviewing the details of the proposal, concluded that it presently does not intend to challenge the parties’ group purchasing arrangement in light of certain competitive safeguards within the structure of the expanded arrangement.
In a month of short winter days, blustery weather, and Siberian-like temperatures, Health Law Scan upped the thermostat in January beginning with an important analysis of the Texas v. Azar decision by the US Court of Appeals for the Fifth Circuit on the constitutionality of the Affordable Care Act. We followed this with a collection of super-heated posts on the FY 2020 Appropriations Act, the DOJ’s $2.6 billion in False Claims Act (FCA) recoveries, MedPAC’s recommendations for payment reductions for hospice and home health, and foreign investment in the healthcare industry under the FIRRMA final rule. In between curling practice and drinking hot chocolate, we detailed a number of important immigration developments including the decision to lift the injunction on the Public Charge rule by the US Supreme Court, and key takeaways from the US v. AseraCare decision for FCA practitioners. As January tobogganed to an icy conclusion, we recapped a pair of Fast Break webinars addressing the Year in Review and the Allina decision, and compiled a list of our most popular blog posts of 2019. So if you happened to miss a blog post or two while searching the internet on how not to turn blue, we suggest you layer up, put another log on the fire, and catch up right here.
- Texas v. Azar – Major Questions Remain Following Fifth Circuit Decision
- Extender Funding, Medicare, and ACA Policy Changes Top FY 2020 Appropriations Act
- 2020 Appropriations Act: CREATES Act
- United States v. AseraCare: Court Debunks Theory That Mere Clinical Disagreement Can Support FCA Liability
- Health Law Scan: Our Most Popular Blog Posts of 2019
- MedPAC Recommends Medicare Payment Reductions for Hospice and Home Health
- Healthcare: DOJ Announces $2.6 Billion in False Claims Act Recoveries for 2019
- CFIUS Issues Final Regulations Under FIRRMA: Healthcare Industry
- US Supreme Court Lifts Injunction on Public Charge Rule; New Visa Restrictions Announced; Expanded Travel Ban Countries List Expected Soon
- Fast Break Recaps: The Year in Review; Unpacking the Allina Decision
We hope you were able to join us for two back-to-back, action-packed Fast Break sessions in December and January.
In December, Jake Harper and Dani Elks discussed the top 10 most influential events of 2019, which included the following:
- Landmark court decisions impacting the False Claims Act, Medicare reimbursement, and medical necessity
- Pronouncements from the US Department of Justice and CMS on enforcement priorities
- Major new rules impacting Stark Law, the Anti-Kickback Statute, and transparency
- Digital health innovation
Our global employment and immigration team details a number of recent developments with important implications for the US healthcare industry. These include a ruling by the US Supreme Court to lift the October 2019 injunction on the public charge rule, visa reciprocity changes for France and Australia, the potential expansion of the list of countries subject to the administration’s travel ban, and eligibility changes for E-1 treaty trader and E-2 treaty investor visas affecting Iranian nationals. Recent studies show that nearly one in four US healthcare industry workers are immigrants. To that end, healthcare industry employers should be aware of and consider how these changes may impact their workforce.
Read US Supreme Court Allows Public Charge Rule on Immigration to Move Forward >>
On January 13, the Committee on Foreign Investment in the United States (CFIUS) published the final rules implementing the Foreign Investment Risk Review Modernization Act (FIRRMA). FIRRMA ushered in substantial changes and expanded the scope of CFIUS and its impact on foreign investment in the United States. The new rules, effective February 13, make permanent the proposed regulations published in September 2019 and will likely have wide-ranging implications for foreign investment in the healthcare industry, particularly from the new focus on access to “sensitive private data” of the US business from investments.
Join partners from the Morgan Lewis CFIUS Working Group for two webinars where we will outline key changes from the September 2019 proposed regulations and the anticipated impact on cross-border investments. The first webinar will be geared toward CFIUS for foreign entities and the second toward CFIUS for domestic entities.
Register now: CFIUS for Non-US Entities – Thursday, January 30
In this LawFlash, our white collar litigation and government investigations team unpacks the fiscal year 2019 False Claims Act (FCA) recovery statistics recently announced by the US Department of Justice. At $2.6 billion in recoveries, 2019 marked the 10th consecutive year that healthcare industry recoveries exceeded $2 billion. To that end, the team addresses the largest recoveries involving healthcare and notes that “enforcement, mostly driven by qui tam filings, remains robust.”
The Medicare Payment Advisory Commission (MedPAC), which advises Congress on Medicare issues, recently finalized and approved a series of recommended updates on January 16 that include payment reductions for hospice and home health.
Hospice
MedPAC recommendation: Hold Medicare base payment rates for hospice steady with no increase, and wage-adjust and reduce the hospice aggregate cap by 20%.
MedPAC addressed its concerns that “hospice payment rates may be higher than needed to ensure appropriate access to care” and recommended no payment update for hospice in fiscal year 2021. With respect to the aggregate cap, MedPAC recommended a wage-adjusted cap to improve equity across providers because high-wage-index areas are more likely to exceed the cap than low-wage-index areas (e.g., a hospice in San Francisco will reach the aggregate cap more quickly than one in Topeka, Kansas). MedPAC further asserted that a 20% cap reduction will improve payment accuracy by focusing payment reductions on hospices with long stays and high margins, characterized by MedPAC in its December meeting as “disproportionately for-profit, freestanding, urban, small and newer entrants into the Medicare program.” If adopted, this would be the first major aggregate cap change in many years.
Home Health
MedPAC recommendation: Reduce the calendar year (CY) 2020 Medicare base payment rate for home health agencies by 7%.
While acknowledging major revisions to home health payments in 2020, including a new unit of payment (Patient-Driven Groupings Model (PDGM)), the removal of therapy as a payment factor, and a new case mix system, MedPAC officials cautioned in the December meeting that Medicare has a history of overpaying for home health “since the PPS was established.” To that end, MedPAC commissioners voted in January to recommend that Congress reduce the CY 2020 Medicare base payment rate for home health agencies by 7% for CY 2021. Noting “home health payment adequacy indicators are positive,” MedPAC officials concluded that their recommended reduction “should not affect the willingness of providers to serve beneficiaries.” However, the agency also recognized that it “may increase cost pressures for some providers.”
What’s Next?
The recommendations will be included in the MedPAC’s March 2020 report to Congress on Medicare payment policy. Mandated by law, these reports hold great sway with Congress and the Centers for Medicare and Medicaid Services (CMS). However, neither Congress nor CMS is required to follow the MedPAC recommendations.
