Legal Insights and Perspectives for the Healthcare Industry

The US Department of Health and Human Services (HHS) recently announced more than $1.8 billion in funding to support the prevention and treatment of opioid addiction. This latest round of funding, authorized in conjunction with the continuing implementation of the 2018 SUPPORT Act, will be awarded by the Centers for Disease Control and Prevention (CDC) and the Substance Abuse and Mental Health Services Administration (SAMHSA) to states and local communities.

The CDC will provide more than $900 million to help state and local governments track overdose data “as closely to real-time as possible.” Packaged as a three-year cooperative agreement “to scale-up prevention and response activities,” the CDC will distribute $301 million in funding for the first year to states, localities, and some territories beginning in September 2019.

We address more than a dozen key proposals from the CMS outpatient prospective payment system (OPPS) and ambulatory surgical center payment systems proposed rule in a recent LawFlash. Chief among them is the agency’s bold new proposal for a broad price transparency program. Other notable proposals include continuing payment reductions for 340B drugs and grandfathered off-campus provider-based departments, both the subject of pending litigation in federal court. CMS is soliciting public input on a multitude of proposals from this rule, and comments are due September 27, 2019. Hospitals will want to carefully assess these changes and consider submitting comments before these proposals become final rules.

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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.

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.