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Legal Insights and Perspectives for the Healthcare Industry

The Office of Management and Budget’s (OMB’s) policy statement emphasizes the role of the Congressional Review Act in the rulemaking process and incorporates rulemaking actions that were not consistently subject to prepublication review under standing executive orders. Questions remain regarding the prospects for regulatory gridlock and burdensome delays.

A recent OMB memorandum instructs departments and agencies of the executive branch to submit “guidance documents, general statements of policy, and interpretive rules” to the OMB’s Office of Information and Regulatory Affairs (OIRA) for prepublication review. The April 11 memorandum, which also expands OIRA review to agency rules historically submitted through the centralized process designated in Executive Order 12866, is effective May 11, 2019. Regulatory watchers caution that the OMB’s action could increase the volume of rules that require OIRA review and potentially result in regulatory gridlock and rulemaking delays.

While Maryland became the first state in the nation to pass legislation creating a Prescription Drug Affordability Board, it may not be the last. Several other states are exploring similar legislation but legal challenges may follow.

Media Module - Datasource Item: Responding to and Preventing Healthcare Data Breaches Lawdition

In this video our resident healthcare privacy and cybersecurity authority, Reece Hirsch, discusses data breaches caused by cyberattacks and other incidents that are an increasingly common worry for in-house counsel. Morgan Lewis has recently partnered with Lawdition, a new service that makes presentations available online, exclusively and for free to in-house lawyers. Watch a full version of the video that includes five things you can start doing today to help prevent data breaches and better prepare your company to respond if they do occur.

We had a great time last Thursday celebrating the American Health Lawyers Association's AHLA Day 2019. Each April, AHLA hosts receptions in multiple cities to bring together the health lawyer community. This year, Morgan Lewis came out in force at the Washington, DC, reception held at McCormick and Schmick's. Michele Buenafe, Joyce Cowan, Ryan Kantor, Amanda Robinson, Jonelle Saunders, and Jake Harper had the opportunity to catch up with colleagues and friends new and old.

We're excited to introduce Tele-Tuesdays, a new feature on Health Law Scan where we'll bring you the latest updates in the world of telehealth legal issues. From new regulations and legislation to enforcement actions and changes in the telehealth landscape, we'll cover it all.

Federally, telehealth continues to be a central feature of the government’s efforts to expand access and control soaring healthcare costs. Just last week, CMS finalized its rules implementing the Bipartisan Budget Act of 2018, which will increase flexibility for Medicare Advantage (MA) plans offering telehealth services irrespective of whether a patient is in a rural or urban area. Right now, MA plans are working feverishly to redesign their telehealth benefits in anticipation of plan year 2020. Providers interested in offering telehealth services should assess their current MA contracts and consider engaging with plans to make sure their telehealth services are covered. According to Kaiser Family Foundation, MA plans now cover 34% of Medicare beneficiaries, so this will be a momentous occasion in the expansion of telehealth coverage. And should the results of this expansion be as favorable as anticipated, expect future legislation that will expand telehealth to all Medicare beneficiaries, whether enrolled in MA plans or in Original Medicare.

Daniel Levinson, the HHS Inspector General (IG), tendered his resignation to President Donald Trump on April 2, effective May 31. Mr. Levinson was the longest serving HHS-IG and under his leadership, the watchdog managed a wide array of oversight, including checks on the implementation of the Affordable Care Act. The HHS-OIG is the largest inspector general office among federal agencies helping to police over 200 HHS programs as well as the massive Medicare and Medicaid programs. The current Principal Deputy Inspector General Joanne Chiedi will become the acting IG on June 1.

Undoubtedly the next HHS-IG appointee will be a staunch advocate of fraud and abuse enforcement, and likely will have years of government audit or enforcement experience, as was the case with previous HHS IGs. It remains to be seen, however, if the appointee will also have private industry experience and will bring to bear deep knowledge of an evolving healthcare delivery system.

In a March 19 letter to CMS and HHS-OIG, Senators Chuck Grassley (R-IA) and Ron Wyden (D-OR) continued their oversight efforts regarding physician-owned distributorship (POD) relationships by raising questions about US Sunshine compliance by PODs. PODs involve the ownership of medical device distributorships by surgeons who use or recommend those products in their surgical procedures. The senators are critical of CMS and OIG efforts to expose and deter POD arrangements, citing long-held concerns that POD arrangements are, as the OIG has suggested in a prior Fraud Bulletin, "inherently suspect” and abusive arrangements that promote medically unnecessary services. The March letter raises an often debated question regarding POD compliance with Physician Sunshine Rules and whether CMS or the OIG have taken sufficient steps to assure transparency compliance with these particular arrangements.

The cool winds of March blew red-hot for the Health Law Scan beginning with a new Senate inquiry into tax-exempt hospitals and ending with an announcement by the US Department of Justice that the Affordable Care Act should be invalidated. In between, we filled out this month’s March Madness bracket with a rundown of important provisions from the proposed interoperability rule, how divided government impacts the healthcare industry, a recap from a very interesting Fast Break on radioactive materials in hospitals, insights for FCA practitioners from the Justice Department, and much more. No worries if you missed anything, we have all for you right here:

“Medicare for All” has appeared in the nation’s political dialogue as we head into the next election cycle, with a number of plans being proposed by Democratic lawmakers. Recent public opinion polls show a growing surge in popularity for expanding the federal program that currently insures older Americans. Yet the polls also show a decline in favorability for Medicare for All when respondents are asked about the details of the plans. While there appears to be general agreement that Americans should have access to affordable coverage, the Democratic plans differ over options for reforming the health insurance system. To that end, the Medicare for All plans can be divided into one of two categories: a single payor or a public option plan. From there, the proposals diverge over a mix of fault lines, tradeoffs, and potential for disruption.

In a tersely worded letter to the US Court of Appeals for the Fifth Circuit, the US Department of Justice (DOJ) announced on Monday that it “has determined that the district court’s judgment in Texas v. U.S. should be affirmed” and “is not urging that any portion of the district court’s judgment be reversed.” In December 2018, Judge Reed O’Connor of the US District Court for the Northern District of Texas reignited the simmering debate over the Affordable Care Act’s (ACA’s) ultimate survival when he ruled the entire law unconstitutional in Texas v. U.S. In a surprising reversal of its previously stated position that only certain provisions of the ACA (such as the ban on preexisting condition protections) should be severed from the statute, the DOJ is now asking the Fifth Circuit to invalidate the entire law. Even before yesterday’s abrupt change of course by the DOJ, the US Department of Health and Human Services has said that it will continue to administer and enforce the ACA during the appeals period.