Repeal Efforts Fail (for now): Can Obamacare Survive?

Posted by Chris Raphaely on March 28, 2017
ACA / No Comments

With the House GOP pulling the American Health Care Act (AHCA) due to lack of sufficient support even within its own party, Obamacare is not out of the woods.

The ACA’s two pillars, the individual marketplaces and Medicaid expansion, remain vulnerable and could be used as political bargaining chips in Washington as the battle over “health care reform” plays out in the coming months and years.

In response to the House’s failure to pass the AHCA, the President and House Speaker have expressly said that Obamacare will “implode” and the administration has many ways to see to it that it does sooner rather than later. On the other hand, the administration and Congress could also move on to on tax reform and other items while changes to the marketplaces are implemented by regulation.  The administration already has proposed regulations on the table that has been characterized as a “good faith” effort to implement minor changes to prop up the marketplaces. Reportedly, however, many insurers will want more in the form of funding for cost sharing reductions and reinsurance to keep sufficient numbers of insurers in the marketplaces long term.  Continue reading…

Chris Raphaely

Chris Raphaely

R. Christopher Raphaely joined Cozen O'Connor's Philadelphia office in 2014 as co-chair of the Health Care Practice Group. Chris joins the firm from Jefferson Health System, where he served as deputy general counsel and general counsel to the system’s accountable care organization and captive professional liability insurance companies.

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Minnesota Federal Court Says Cross-Plan Offsets Are Unlawful; Certifies Case for Immediate Appeal

Posted by Chris Raphaely on March 23, 2017
Healthcare / No Comments

gavel and bookThe U.S. District of Minnesota has ruled in Peterson v. Unitedhealth Grp. Inc., No. 14-CV-2101 (PJS/BRT), 2017 WL 991043 (D. Minn. Mar. 14, 2017) that ERISA does not permit United Healthcare (“United”) to claw back alleged overpayments related to patients from one plan by reducing or eliminating payments related to patients from different self-insured plans, dealing a potential blow to the use of an effective tool that health insurers have used to recoup alleged overpayments from providers.

In Peterson, the Plaintiffs were healthcare providers who brought suit against United as assignees of patients who were enrolled in United-administered plans. United had allegedly overpaid Plaintiffs for services provided to certain patients, and offset these alleged overpayments by reducing or eliminating payments for services that Plaintiffs provided to other patients, who were members of different United-administered self-insured ERISA plans. This practice is known as cross-plan offsetting. Continue reading…

Chris Raphaely

Chris Raphaely

R. Christopher Raphaely joined Cozen O'Connor's Philadelphia office in 2014 as co-chair of the Health Care Practice Group. Chris joins the firm from Jefferson Health System, where he served as deputy general counsel and general counsel to the system’s accountable care organization and captive professional liability insurance companies.

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Trump Takes First Step Toward Dismantling ACA and Buys Time with an Executive Order: Is it Substantive or Merely Symbolic?

Posted by Chris Raphaely on January 23, 2017
ACA, HHS / No Comments

Hours after taking the oath of office President Donald Trump signed a broadly worded executive order (“Order”) intended to minimize if not eliminate the impact of the ACA’s least popular provisions. With the Order President Trump can claim immediate action towards fulfilling a major campaign pledge while giving his administration and the Republican led Congress time to come up with a replacement plan.

The Order directs the secretary of HHS and other agency heads to, among other directives:

[E]xercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the [ACA] that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications. [And] [t]o . . . exercise all authority and discretion available to them to provide greater flexibility to States and cooperate with them in implementing healthcare programs. [And] [t]o . . . encourage the development of a free and open market in interstate commerce for the offering of healthcare services and health insurance, with the goal of achieving and preserving maximum options for patients and consumers.

The Order makes it clear that any agency actions under the order must be within the confines of the law and its existing regulations, both of which remain in place at least for now. The agencies still have the option of amending or repealing ACA regulations but the Order gives them the authority to take some action before going through the regulatory approval process.

Apparently, the agencies will decide which stakeholders’ costs and “burdens” under the ACA will be reduced. This presents them with an interesting challenge given the opposing interests inherent in the broad group of stakeholders expressly targeted for relief under the Order. For example, if the scope of the individual mandate (likely the prime target of the Order) were reduced relieving some individuals of the cost of buying health insurance, it would likely skew the risk pool of the exchange plans to less healthy participants increasing the cost and burden on the exchange’s insurers and those individuals who want to purchase insurance through the exchanges. That action could also end up reducing overall insurance coverage increasing the uncompensated care hospitals and other providers would be required to deliver.

Perhaps the most interesting aspect to watch, however, will be whether the Order ultimately has any significant substantive effect or simply ends up being a symbolic gesture. Some observers have contended that significant delays to, or gutting of, a portion of the ACA’s tightly woven and inter-related pieces mid-year 2017 would create chaos in the affected programs, like the health insurance exchanges, which are already underway this year. Therefore, there has been speculation that actions under the Order are not likely to be effective until 2018. The question is whether any actions under the Order, which are expressly limited to those that are permissible under the ACA, will mean anything in 2018 when it is almost certain that the ACA will have already been repealed.

Whether substantive or symbolic, clearly the first step in the ACA’s dismantling has been taken and we will be watching very closely as the administration and Congress take many more.

 

 

Chris Raphaely

Chris Raphaely

R. Christopher Raphaely joined Cozen O'Connor's Philadelphia office in 2014 as co-chair of the Health Care Practice Group. Chris joins the firm from Jefferson Health System, where he served as deputy general counsel and general counsel to the system’s accountable care organization and captive professional liability insurance companies.

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Pennsylvania Issues Grower/Processor and Dispensary Permit Applications for Medical Marijuana Program

Posted by Chris Raphaely on January 23, 2017
PA Medical Marijuana Program, Pennsylvania Department of Health / No Comments

filling out applicationOn January 17, 2017, the Pennsylvania Department of Health (“DOH”) released grower/processor and dispensary permit applications (“Applications”), which can be found on Pennsylvania’s Medical Marijuana Program website. DOH will accept Applications from February 20 – March 20, 2017, and will begin taking questions about the Applications on February 8, 2017. Other highlights regarding the application process are set forth below.

  • 12 grower/processor permits will be issued.
  • 27 dispensary permits will be issued.
  • Two grower/process permits will be issued in each of the six regions in the Commonwealth.
  • The maximum number of dispensary locations in each region (by county) is set forth in the Applications’ instructions on page two.
  • Each applicant will receive a weighted score out of a maximum number of 1,000 points.
  • The Applications require information regarding, among other items, an applicant’s diversity plan, background information about principals, financial backers, operators and employees, capital sufficiency, an applicant’s plan of operation and an operational timetable, and an applicant’s anticipated community impact.
  • Principals means “an officer, director or person who directly or beneficially owns securities of an applicant or permittee, or a person who has a controlling interest in an applicant or permittee or who has the ability to elect the majority of the board of directors of an applicant or permittee or otherwise control an applicant or permittee, other than a financial institution.”
  • Financial backers means “an investor, mortgagee, bondholder, note holder, or other source of equity, capital or other assets other than a financial institution.”
  • Financial institution means “a bank, a National banking association, a bank and trust company, a trust company, a savings and loan association, a building and loan association, a mutual savings bank, a credit union or a savings bank.”
  • The non-refundable application fee for growers/processors is $10,000, and the initial permit fee for growers/processors is $200,000 (both payable with the Application).
  • The non-refundable application fee for dispensaries is $5,000, and the initial permit fee for dispensaries is $30,000 per dispensary location, for up to $90,000 (both payable with the Application).
  • A rejected Application would be returned to an applicant with the initial permit fee.
  • DOH may reject an Application that is received after March 20, 2017 or without a U.S. Postal Form 3817, which is required as proof of an applicant’s mailing date.
  • The DOH will post FAQs regarding the Applications on its website.

Continue reading…

Chris Raphaely

Chris Raphaely

R. Christopher Raphaely joined Cozen O'Connor's Philadelphia office in 2014 as co-chair of the Health Care Practice Group. Chris joins the firm from Jefferson Health System, where he served as deputy general counsel and general counsel to the system’s accountable care organization and captive professional liability insurance companies.

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Futures in Doubt of CMS’ New Mandatory Bundled Payment Models and Medicare Shared Savings Program Track 1+

Posted by Chris Raphaely on December 23, 2016
CMS / No Comments

medical-documentsWord spread quickly Monday (December 20, 2016) about CMS’ issuance of final regulations (to be published in the Federal Register on January 3, 2017) rolling out new mandatory bundled payments models for Acute Miocardial Infarction (AMI), Coronary Artery Bypass Graft (CABG), Surgical Hip and Fracture Treatment (SHFFT), a Cardiac Rehabilitation (CR) incentive model and Track 1+ Accountable Care Organizations. Speculation that President-elect Donald Trump’s nominee for HHS secretary, Rep. Tom Price, would move to roll the regulations back spread just as quickly.

The new regulations mandate bundled payment models (covering the period from admission to ninety days post-discharge) for AMI and CABG in 98 geographies covering 1,120 hospitals; for SHFFT in the 67 geographies where the Comprehensive Joint Replacement (CJR) has already been mandated covering 850 hospitals and for CR in 90 geographies covering 1,320 hospitals. CMS’ chart of geographies covered by each program is set forth here. The AMI, CABG and SHFFT programs give participant clinicians the opportunity to be excluded from Medicare and CHIP Reauthorization Act of 2015’s (MACRA) Medicare Incentive Payment System (MIPS) and to qualify under MACRA’s Advanced Alternative Payment Model (AAPM). Continue reading…

Chris Raphaely

Chris Raphaely

R. Christopher Raphaely joined Cozen O'Connor's Philadelphia office in 2014 as co-chair of the Health Care Practice Group. Chris joins the firm from Jefferson Health System, where he served as deputy general counsel and general counsel to the system’s accountable care organization and captive professional liability insurance companies.

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House Passes 21st Century Cures Act

Posted by Chris Raphaely on December 02, 2016
Food and Drug Law / No Comments

On November 30, 2016, the House overwhelmingly passed (392-26) the 21st Century Cures Act (“Bill”). The Bill moves on to the Senate next week and it is projected to pass in the Senate as well. Notably, the Bill seeks to improve upon the federal regulatory structure regarding Federal Drug Administration (FDA) approval and expediting the development of new drugs. Under the Bill, FDA funding would increase by $500 million. The Bill also provides for the authorization of new National Institutes of Health research grant funding, in the billions, including funding for Vice President Biden’s “moonshot” to cure cancer. Importantly, a proposed provision regarding reporting under the Sunshine Act was removed from the Bill. Specifically, the proposed provision would have exempted from the reporting requirements of the Physician Payment Sunshine Act payments from drug and device manufacturers to physicians for speaking at continuing medical education events and for contributing to medical textbooks, or medical journals.

Chris Raphaely

Chris Raphaely

R. Christopher Raphaely joined Cozen O'Connor's Philadelphia office in 2014 as co-chair of the Health Care Practice Group. Chris joins the firm from Jefferson Health System, where he served as deputy general counsel and general counsel to the system’s accountable care organization and captive professional liability insurance companies.

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Third Circuit Puts Penn State Hershey/Pinnacle Merger on Hold

Posted by Chris Raphaely on October 04, 2016
FTC / No Comments

gavel and bookLast week, the Third Circuit Court of Appeals held that the merger between Penn State Hershey Medical Center and PinnacleHealth System, the two largest hospitals in Harrisburg, Pennsylvania, may not move forward at this time. The Court of Appeals overturned the District Court’s (Middle District of PA) denial of the FTC’s and the Commonwealth of Pennsylvania’s request for a preliminary injunction, directing the District Court to enter a preliminary injunction blocking the merger “pending the outcome of the FTC’s administrative adjudication.”

In reaching its decision, the Court of Appeals held that the critical determination of the relevant market for a proper antitrust analysis should be defined primarily “through the lens of the insurers” and that it “was error for the District court to completely disregard the role insurers play in the healthcare market.” The Court of Appeals ruled that the relevant market was the four- county Harrisburg area. It found that the market was highly concentrated and that the combined hospitals would control 76% percent of the market. As a result the plaintiffs were found to have established a prima facie case that the merger “is presumptively anticompetitive.”

In rebuttal, the hospitals alleged, among other things, that, the merger would result in efficiencies leading to capital savings and enhance the hospitals’ efforts to engage in risk-based contracting, but the Court of Appeals found that these arguments failed to demonstrate tangible, verifiable benefits to consumers, and only constituted “speculative assurances.” It remains to be seen whether the hospitals will continue their pursuit of merger through the FTC’s administrative review process or abandon it.

This decision, like others involving hospitals that have preceded it, underscores the unique nature of the markets in which hospitals and other healthcare providers operate. These markets are not primarily defined by the direct impact of market consolidation upon the behavior of the ultimate consumers, the patients. Instead, the markets are defined by the patients’ purchasing surrogates, their health insurers.

For more information about this decision, contact Chris Raphaely, Nicole Martin or a member of Cozen O’Connor’s Health Law team

Chris Raphaely

Chris Raphaely

R. Christopher Raphaely joined Cozen O'Connor's Philadelphia office in 2014 as co-chair of the Health Care Practice Group. Chris joins the firm from Jefferson Health System, where he served as deputy general counsel and general counsel to the system’s accountable care organization and captive professional liability insurance companies.

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New Grower/Processor Regulations Released

Posted by Chris Raphaely on August 22, 2016
DOH, Pennsylvania, Regulations / No Comments

On August 18, 2016, the Secretary of Pennsylvania’s Department of Health (“DOH”), Dr. Karen Murphy, announced that the DOH has posted draft temporary regulations (“Regulations”) focusing on the 25 medical marijuana grower/processor permits that will become available under Pennsylvania’s Medical Marijuana Act (“Act”) that was passed last April.

The Regulations state the general application requirements for medical marijuana organizations, which requirements include detailed information about principals and financial backers of such organizations. Medical marijuana organizations include not just grower/processors, but also clinical registrants and dispensaries. The application requirements also contain a clear commitment to foster diversity. The Regulations establish procedures for promoting and ensuring that medical organizations foster diversity through participation of diverse groups in all aspects of the medical organization’s operations. This includes but is not limited to requiring each organization to have a diversity plan. Diverse groups are defined under the Regulations as “disadvantaged business[es], minority-owned business[es], women-owned business[es], service-disabled veteran-owned small business[es] or veteran-owned small business[es] that ha[ve] been certified by a third-party certifying organization.”

The Regulations also contain specific requirements for grower/processor permits. Application forms for permits will be posted on the DOH website in the future. Among the requirements is that a grower/processor notify DOH within six months of being issued an initial permit that it is ready, willing and able to begin production.

The Regulations prohibit executive level employees of the Commonwealth and their immediate family members from being employed by or holding an interest in medical marijuana organizations while employed by the Commonwealth and for one year thereafter.

The Regulations are not final and are open for public comment until August 26, 2016.

Although Pennsylvania joins 23 other states and the District of Columbia to legalize medical marijuana, marijuana is still classified as a Schedule I controlled substance by the U.S. Drug Enforcement Agency, and as such it remains a crime under federal law to grow, sell and/or use marijuana. Any content contained herein is not intended to provide legal advice in connection with the violation of any state or federal law.  Although the Act provides for the legalization of medical marijuana in the Commonwealth of Pennsylvania, one should obtain legal advice with respect to any such compliance issues.

Stay tuned for details regarding an upcoming Cozen O’Connor webinar on these Regulations.

For more information about the Regulations or the Act, contact Chris Raphaely, J. Nicole Martin or another member of Cozen O’Connor’s Cannabis Industry Team.

Chris Raphaely

Chris Raphaely

R. Christopher Raphaely joined Cozen O'Connor's Philadelphia office in 2014 as co-chair of the Health Care Practice Group. Chris joins the firm from Jefferson Health System, where he served as deputy general counsel and general counsel to the system’s accountable care organization and captive professional liability insurance companies.

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Medical Marijuana in Pennsylvania: What Physicians Should Know

Posted by Chris Raphaely on May 09, 2016
DEA, DOH, Medicaid, Pennsylvania / No Comments

shutterstock_244196869On April 17, 2016, Governor Wolf signed Act 16 of 2016, making Pennsylvania the 24th state (plus the District of Columbia) to legalize marijuana for medical use. The full text of the act is available here.

Physicians, not surprisingly, will play a vital role in making medical marijuana available to Pennsylvanians, while ensuring patient safety in the process.  This is what they should know about Act 16: Continue reading…

Chris Raphaely

Chris Raphaely

R. Christopher Raphaely joined Cozen O'Connor's Philadelphia office in 2014 as co-chair of the Health Care Practice Group. Chris joins the firm from Jefferson Health System, where he served as deputy general counsel and general counsel to the system’s accountable care organization and captive professional liability insurance companies.

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Health Law Year in Review

Posted by Chris Raphaely on December 17, 2015
Uncategorized / No Comments

IMG_1128On Tuesday, December 8 Cozen O’Connor’s Health Care practice and industry team hosted the Health Law Year in Review, an annual discussion of hot topics facing those in the health care industry.

Presentation topics included:

  • Update from Washington, DCHavi Glaser discussed the Affordable Care Act five years in and provided updates. She also gave a forecast of what is likely to happen in 2016 and discussed pharmaceutical pricing.
  • The Move to Pay for Value ReimbursementChris Raphaely discussed changes to how we pay for health care services and pay providers. He also discussed new initiatives, including ACOs, risk arrangements, readmission penalties, care management fees, capitation, bundled payments, quality incentives and patient experience.
  • Employment UpdateDebra Friedman looked back at hot employment issues from 2015 and forward to issues that may come up in 2016, including wellness programs and wage and hour developments impacting health care providers.
  • Are You Protecting Your Intellectual Property?Kyle Vos Strache looked at the different types of intellectual property and how each can increase a company’s value and mitigate risk.
  • Hot Tax TopicsRichard Silpe talked about the 2018 Cadillac Tax, final regulations under IRC Section 501(r) and the tax implications of the case involving Morristown Memorial Hospital determining whether the hospital was non-profit or for-profit.
  • Trends in Concierge Medicine and Alternative Payment Methods – Marc Auerbach discussed the three models of concierge medicine, traditional, hybrid and direct primary care medical home, and the benefits of choosing each.
  • Antitrust Developments in Health CareJonathan Grossman led a discussion on the recently announced mergers of Aetna/Humana and Anthem/Cigna. He also discussed the Supreme Court’s limit of state action immunity in NC Dental and the continuing aggressive federal and state antitrust enforcement.
  • Cybersecurity and Health CareRyan Blaney and Gregory Fliszar discussed cybersecurity risks and best practices and the steps to take for compliance.
  • M&A UpdateAnna McDonough and Trey Crabb (Ziegler Investment Banking) talked about recent trends in health care transactions.

IMG_1137For more information about any of the topics listed above, or copies of the presentations, please click the speaker’s name to be directed to their biography. Please click here to be added to our health care alert list to read about new developments and to receive invitations to upcoming seminars and webinars.

Chris Raphaely

Chris Raphaely

R. Christopher Raphaely joined Cozen O'Connor's Philadelphia office in 2014 as co-chair of the Health Care Practice Group. Chris joins the firm from Jefferson Health System, where he served as deputy general counsel and general counsel to the system’s accountable care organization and captive professional liability insurance companies.

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