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.

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.

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.