Multiple States Considering Possible Modification to Their “Certificate of Need” Laws

In December, the U.S. Department of Health and Human Services issued a report – “Reforming America’s Healthcare System Through Choice and Competition” – expressly calling upon the states to repeal their “Certificate of Need” (CON) laws. In the report, HHS indicated that the existence of such laws – which typically prevent healthcare providers from expanding their services/entering new markets absence their ability to demonstrate to state regulators that there is an unmet need for such services in the community – has been a significant cause of escalating healthcare costs.

Perhaps in response to this prodding, legislation has recently been introduced in several states that would modify their respective CON laws. In Georgia (HB 198), South Carolina (HB 3823), Virginia (HB1680) and Alaska (HB 17), for example, legislation has been proposed that would either reduce the scope of such laws or repeal them altogether. In contrast, in Indiana, legislation (S. 573) has been introduced that would create a new CON law, something that has not occurred in any state in quite some time. Additionally, while not yet introduced, Florida is also expected to consider changes to its CON laws this legislative session as well. Continue Reading

Year in Review/Year Ahead: Medicaid Expansion: An Unanswered Call in 2018

By Steven Grigas on January 29, 2019 Posted in Affordable Care Act and Other Healthcare Reform Legislation, Healthcare Law, Medicare & Medicaid

The Akerman Healthcare Practice Group, as part of its ongoing informational blogs and Practice Updates, will be publishing a series of articles, each outlining a significant healthcare industry issue from 2018, with an eye towards what to expect in 2019. The following is the third in our series – The Year in Review/The Year Ahead:

One of the more significant “non-events” of 2018 was Florida’s continued rejection of the call for Medicaid expansion under the Affordable Care Act – a/k/a Obamacare. Florida remains one of 17 states that has not expanded Medicaid. Last debated in 2015, the Governor and Legislature of Florida have shown little interest in pursuing Medicaid expansion over the past few years. This comes despite a significant increase in the number of uninsured in the State, and a projected loss over 10 years of approximately $66 billion dollars. A recent study by the non-partisan Urban Institute found that an expansion of Medicaid in Florida would cover an additional 650,000 lives and lower the State’s uninsured rate from 15.7% to nearly 11%. And, while a poll of Florida residents indicated that about 68% favorably support expansion of Medicaid, Republican leadership of the State seemed more focused in 2018 upon alternative measures such as block grants, and premium assistance. Continue Reading

Year in Review/Year Ahead: Vertical Mergers

By James M. Burns and Bruce D. Platt on January 23, 2019 Posted in Healthcare M&A, Joint Ventures, Transactions & Health Ventures, Uncategorized

The Akerman LLP Healthcare Practice Group, as part of its ongoing informational blogs and Practice Updates, will be publishing a series of articles, each outlining a significant healthcare industry issue from 2018, with an eye towards what to expect in 2019. The following is the second in our series – The Year in Review/The Year Ahead:

In 2018, there were a number of large mergers in the healthcare industry that have the potential to significantly alter the ways in which healthcare is delivered in the United States. Several of the largest announced mergers were “vertical mergers” – mergers in which the merging parties are not current competitors, and are instead operating at different levels of the healthcare distribution chain. Two of the biggest such mergers – but certainly not the only ones – were the merger between Cigna and Express Scripts and CVS and Aetna. Each of these mergers paired a “top five” national health insurer with a “top five” pharmacy benefit manager.

Year in Review/Year Ahead: The Eliminating Kickbacks in Recovery Act of 2018-The New All-Payor Anti-Kickback Statute

By William J. Spratt, Jr. on January 22, 2019 Posted in Fraud & Abuse & False Claims Act, Health Insurers & Managed Care Organizations, Healthcare Law

The Akerman Healthcare Practice Group, as part of its ongoing informational blogs and Practice Updates, will be publishing a series of articles, each outlining a significant healthcare industry issue from 2018, with an eye towards what to expect in 2019. The following is the first in our series – The Year in Review/The Year Ahead:

The enactment, on October 24, 2018, of a federal law with a far too complicated name, i.e. the “Substance Use–Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act” or the “SUPPORT for Patients and Communities Act”, created an all-payor anti-kickback statute aimed at prohibiting certain marketing practices of the substance abuse treatment community. Specifically, within the Act is the Eliminating Kickbacks in Recovery Act of 2018 (‘EKRA”), which charts new ground for permissible ways to compensate employees and contractors engaged by “recovery homes,” “clinical treatment facilities,” and “laboratories.”

New Year, New Wellness Program Rules

By Erin M. O'Neal and Beth Alcalde on January 2, 2019 Posted in Accountable Care Organizations, Healthcare Law

Employers with established wellness programs that collect health information and/or require a medical exam can no longer rely on the EEOC regulations to justify that incentives provided under their wellness programs are voluntary. On December 20, the EEOC published a final rule (83 Fed. Reg. 65296) vacating the rules that allowed employers to offer those financial incentives to workers who participated in those wellness programs.

The EEOC entered the wellness program regulation arena in 2016 with rules under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). The ADA and GINA Wellness Program Rules required employers sponsoring wellness programs that collect health information (such as through a health risk assessment) and/or require a medical exam (for example, a biometric screening) to satisfy certain requirements. One such requirement involved limiting incentives under the wellness program to 30% of the cost of health coverage, so that the wellness program would qualify as a “voluntary” employee health program. Continue Reading

CVS Completes Acquisition of Aetna

By James M. Burns on November 27, 2018 Posted in Antitrust, Government Affairs, Licensure & Regulatory, Healthcare M&A, Joint Ventures, Transactions & Health Ventures

In a filing with the Securities and Exchange Commission on November 26, CVS Health Corporation announced that it has received all of the regulatory approvals necessary to complete its acquisition of Aetna and that the transaction will close on or before November 28. The announcement follows the recent approvals of the deal received from California and New York regulators. CVS previously received approval for the deal from the United States Department of Justice Antitrust Division in October, conditioned upon CVS’s agreement to divest Aetna’s Medicare Part D business to Wellcare. CVS has already begun steps to satisfy that requirement. Continue Reading

DOJ Settles “Anti-Steering” Antitrust Case Against Atrium Health

By James M. Burns on November 19, 2018 Posted in Antitrust, Government Affairs, Licensure & Regulatory

The United States Department of Justice Antitrust Division announced on November 15 that it was settling its antitrust lawsuit against Atrium Health (formerly known as Carolinas Health System). The action, United States v. Atrium Health, filed in the United States District Court for the Western District of North Carolina, challenged Atrium’s use of restrictions in its contracts with commercial insurers that the Antitrust Division contended had anticompetitive effects, preventing health insurers from promoting more cost-effective healthcare services for consumers in and around Charlotte, North Carolina.

Atrium is the largest healthcare system in North Carolina, and operates nine general acute-care hospitals in Charlotte, North Carolina. In 2016, the Antitrust Division, together with the North Carolina Attorney General’s Office, filed a suit against Atrium, contending that Atrium had used its dominant market position in Charlotte to force insurers to refrain from engaging in practices that might “steer” members to lower cost providers (principally through the creation of narrow networks and/or tiered networks that would not have included Atrium, absent the contractual prohibition). The Antitrust Division also alleged that Atrium’s contracts constrained insurers from providing consumers and employers with information regarding the cost and quality of alternative health benefit plans. Continue Reading

Privacy Policy: The Midterm Effect

By Robert E. Slavkin on November 13, 2018 Posted in Electronic Health Records & Medical Records, Healthcare Law, Technology

Congress has long attempted to grapple with issues of cyber-security, both within the healthcare field, and generally in the United States. The Health Insurance Portability and Accountability Act (HIPAA), as well as the Health Information Technology for Economic and Clinical Health Act (HITECH) have provided significant compliance requirements for healthcare entities in the area of data security. For the last eight years, though, a united Congress has not addressed whether or not there should be a federal standard for how companies as a whole manage electronic data. Additionally, there is yet to be a federal law that addresses curtailing attempted foreign disruption of both government and private industry.

Ironically, it is possible that a divided Congress may do more to move the needle on cybersecurity than the current one? On most controversial issues, tax cuts, healthcare, there will likely be little to no movement due to partisan gridlock. However, issues like privacy tend to have bipartisan support, so there may be movement forward on the issue.

The issue of an overarching federal privacy regulation has been spurred on by the European Union’s General Data Privacy Regulation (GDPR) enacted earlier this year. It has caused all companies that do business in Europe to take a deep, hard look at their data infrastructure, and, in some cases, make significant investments in order to come into compliance. Additionally, states such as California enacted what is considered our country’s first laws to provide consumers with greater control of what companies may do with their data. In some ways, the California law contains similar aspects to the EU’s GDPR regulations.

Up until now, certain congressional committees have held hearings with tech industry representatives to discuss what a privacy framework might come to look like. Of course, as of yet, no proposed legislation has resulted from those conversations. With calls for action in the last several months from some industry giants such as Google and Microsoft, bipartisan action may not be far behind.

On-Line Resources Help Nonprofit Organizations Prepare for Cybersecurity Threats

By Elizabeth F. Hodge and Paul L. Kobak on November 8, 2018 Posted in Tax Exempt

The effects of a data breach can be disastrous for any company, but especially for a nonprofit organization, not only because of the harm to the affected individuals, including those served by the organization, but also the crippling effect it could have on day-to-day operations of an organization with limited resources. A security incident can also damage the organization’s reputation and ability to raise funds. Mitigating a data breach – which could include hiring network forensics investigators, retaining legal counsel, and sending breach notification letters to every person whose data may have been compromised – can get expensive quickly. Moreover, an organization’s own unintentional release of sensitive information could have consequences as serious as a security breach caused by a scammer.

Nonprofit organizations often collect personal information from a variety of sources such as donors, employees, volunteers, and the people who benefit from their services. This information is diverse and might include credit card and personal contact information of donors, financial and health information about the people served by the organization, and payroll and other employment information of its employees. The information collected and retained by nonprofit organizations is exactly the type of data cyber criminals pursue. Yet, often due to the nonprofit model, limited resources that could be used to proactively address cybersecurity threats may be allocated elsewhere. Even if resources are dedicated to cybersecurity, cyber criminals may perceive nonprofits as “soft targets.” Continue Reading

TV Drug Commercials Must Disclose the Drug’s List Price if HHS Adopts Proposed Rule

By Martin R. Dix and Thomas A. Range on October 18, 2018 Posted in Medicare & Medicaid, Pharmacy, Drugs, Medical Devices & Equipment

We are all familiar with prescription drug television commercials where it sounds like they hired a professional auctioneer to recite the drug side effects so fast you can hardly understand them. The U.S. Department of Health and Human Services (HHS) announced a proposed rule that would require pharmaceutical companies that advertise their prescription drug products on television to also disclose the “list price” (also known as the Wholesale Acquisition Cost) of certain drugs. The list price is the price that a drug manufacturer charges a drug wholesaler and does not include the wholesaler’s charges for delivering the drugs to the pharmacy or the pharmacy’s charges for dispensing the medication to the patient. Thus, list price is somewhat lower than an uninsured patient paying cash would normally pay and would be more useful to patients if it reflected what they could expect to pay for the drug.

Under the proposed rule, if a drug manufacturer advertises a prescription drug on television (including broadcast, cable, streaming, and satellite), the advertisement must disclose the list price of a 30-day supply for the drug if it can be reimbursed through Medicare or Medicaid. Drugs whose list prices do not exceed $35 per month for a 30-day supply or typical course of treatment will not be subject to the price-disclosure requirement.

The proposed rule is designed to encourage consumers to become more price sensitive, which in turn could minimize their out-of-pocket costs as well as the costs to prescription drug programs. Patients with high-deductible health plans often pay for their drugs until their insurance coverage is triggered. Additionally, seniors covered under Medicare Part D have coinsurance and out-of-pocket expenses. If consumers have access to better pricing information, HHS believes consumers may select lesser cost alternatives if all else is equal relative to the patient’s care. HHS also cites economic data indicating that a price-disclosure requirement would be likely to motivate drug manufacturers to be less willing to raise prices. Continue Reading