Legal Insights and Perspectives for the Healthcare Industry

Summer is almost upon us. And in between the BBQs, pool parties, and baseball games, you might be trying to understand the risks involved in offering healthcare services through telehealth. Whether you're an independent physician or practitioner, part of a hospital or physician group, or working for a telehealth platform provider, there are a number of things to consider.

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.”

CMS is expanding a national pilot program (the Value-Based Insurance Design Model, or VBID) that will allow Medicare Advantage (MA) plans for the first time to include hospice (end of life) coverage in plan designs. Since the inception of Medicare Part C, MA plans have “carved out” hospice care, leaving plan enrollees to receive end-of-life care under traditional Medicare Part A. Demonstrating the administration’s willingness to test innovative, value-based models to reduce cost, CMS is moving forward with a pilot that will allow eligible MA plans in all 50 states and territories that apply to the pilot to participate in various VBID programs—a significant expansion of the initial seven state VBID models that tested certain other VBID interventions (adding an additional three states in 2018).

Emerging as an industry disrupter, the Office of Inspector General for the US Department of Health and Human Services (OIG) has waded knee-deep into health policy and economics in proposing dramatic changes to the anti-kickback discount safe harbor protection. Its latest move targets certain industry sectors, proposing to remove their protection from administrative and criminal prosecution in connection with rebates and price reductions for prescription drugs.

Under the proposed rule issued February 6, the OIG proposes to amend the language of the existing discount safe harbor to no longer protect price reductions from prescription drug manufacturers to sponsors, MA plans, or Medicaid managed care organizations (MCOs), or to pharmacy benefit managers (PBMs) under contract with those entities, in connection with the sale or purchase of prescription drugs (unless the price reduction is otherwise required by law). The proposal is elegant and simply excludes from the definition of a “discount” price reductions or other remuneration paid from a drug manufacturer to sponsors and MA plans, Medicaid MCOs, and PBMs. If a price reduction is not a discount, it is not excepted or protected and can be subject to enforcement. No other health industry sector is apparently targeted for this administrative rule change.