A Week After Pharma Price Disclosure Is Rule Struck Down, D.C. Judge Upholds Hospital Price Transparency Rule

Posted by Chris Raphaely and Danielle Sapega on June 24, 2020
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As we indicated in last week’s blog post , the D.C. Circuit Court’s refusal to uphold HHS’ pharmaceutical price disclosure rule (“RX Rule”) was not a predictor of how the trial court might rule in the closely watched challenge to HHS’ hospital price transparency rule (“Hospital Rule”). In a June 23, 2020 ruling on cross motions for summary judgment, American Hospital Association, et. al. v. Azar, D.C. District Court Judge, Carl Nichols, ruled that HHS did not overstep its authority under Section 2718 of the Public Health Services Act (“Section 2718”) by requiring hospitals to publish their “gross charges”, payer-specific negotiated rates, discounted cash prices, and de-identified minimum and maximum negotiated charges.  

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Pharma Price Disclosure Rule Struck Down: Will Hospital Price Transparency Rule Meet the Same Fate?

Posted by Chris Raphaely and Danielle Sapega on June 19, 2020
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On June 16, the D.C. Circuit Court struck down the Centers for Medicare and Medicaid Services’ (“CMS”) rule issued in May 2019 requiring pharmaceutical companies to disclose the wholesale acquisition cost of drugs over $35 in their direct-to-consumer television advertisements (“RX Rule”). Similar to the RX Rule, the Hospital Price Transparency Rule, issued on November 27, 2019, requires hospitals to publish, among other information, payor-specific rates for certain services on their websites beginning on Jan 1, 2021 (“Hospital Rule”). Both rules stem from the Trump administration’s stated efforts to improve the nation’s health care quality and transparency, and both were met with swift legal opposition. The Hospital Rule litigation, American Hospital Association et al v. Azar, is currently before the U.S. District Court for the District of Columbia. While the D.C. Circuit Court’s RX Rule decision could be viewed as a predictor of the outcome of the Hospital Rule litigation, the alleged statutory authority underlying the Hospital Rule is different than the statutory authority underlying the RX Rule.  Therefore, the Circuit Court’s ruling in the RX Rule litigation may not be an accurate barometer of the likely outcome in the Hospital Rule litigation.

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Additional Health Care Provider Relief Funds In April Stimulus Bill

Posted by Danielle Sapega on April 28, 2020
Healthcare, HHS / No Comments

On Friday, April 24th, President Trump signed the Paycheck Protection Program and Health Care Enhancement Act (“Act”) into law that will send an additional $75 billion to the Public Health Emergency and Social Services Fund (“Fund”) used to reimburse eligible health care providers for health care related expenses or lost revenues that are attributable to COVID-19. These funds will be in addition to the $100 billion previously appropriated to the Fund in the CARES Act. Of that $100 billion, the first $30 billion was distributed through the Health Resources and Services Administration (HRSA) to health care providers proportionally, based on the providers’ share of total 2019 Medicare payments. HHS has outlined how the remaining $70 billion of the initial $100 billion Congress dedicated to the Fund in the CARES Act would be allocated to providers, with additional payments starting April 24th. However, HHS has not published any additional guidance as to how the Act’s additional $75 billion will be allocated.

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HHS to Release Highly Anticipated Public Health and Social Services Emergency Fund Guidance Soon

Posted by J. Nicole Martin and Danielle Sapega on April 03, 2020
HHS / No Comments

The CARES Act (“Act”) appropriates $100 billion to create a Public Health Social Service Emergency Fund (“Fund”) to prevent, prepare for, and respond to coronavirus domestically and internationally for necessary expenses to reimburse, through grants or other mechanisms, eligible health care providers enrolled in Medicare and Medicaid who provide diagnoses, testing, or care for individuals with possible or actual cases of COVID–19, for health care-related expenses or lost revenues that are attributable to coronavirus. Although the Act sets forth some high level qualifying criteria, the actual mechanism by which providers can apply for or request funds, or additional qualifiers for eligibility, if any, have not yet been released. To date, the Act notes that funds appropriated under this provision may be used for:

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Texas v. U.S.: 5th Circuit Holds Individual Mandate is Unconstitutional, but Remands to District Court to Decide Severability

Posted by Chris Raphaely and Danielle Sapega on December 19, 2019
ACA / No Comments

In a 2-1 decision published on December 18, 2019, a 5th Circuit panel upheld the Texas District Court’s decision ruling that the ACA individual mandate tax which, since January 2019, has had no monetary consequence, is unconstitutional. Citing the Supreme Court’s 2012 NFIB v. Sebelius opinion, the panel explained that the key feature of the individual mandate –the critical tax attributes that once saved the mandate from unconstitutionality- no longer exist, and therefore it can no longer be classed under Congress’ taxing power. Despite definitively ruling on this key issue, the panel remanded the case to the District Court to take a closer look at whether the individual mandate’s unconstitutionality is severable, or whether the entire ACA now must be struck down.

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Pennsylvania Act 112 of 2019: Opioid Treatment Agreements

Posted by Danielle Sapega on December 03, 2019
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As another mark of progress in the fight against opioid addiction, Governor Wolf signed Senate Bill 572 (the “Act”) into law on November 27, 2019, requiring prescribing providers (referred to as “Prescribers”) to take several additional steps before issuing a prescription for an opioid in certain treatment situations. Specifically, the Act’s requirements kick in before a Prescriber can issue a patient the first prescription in a single course of treatment for chronic pain with a controlled substance containing an opioid.  

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Google Partners with Ascension To Store and Analyze Millions of Patient Health Records

Posted by Gregory M. Fliszar on November 19, 2019
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Google has confirmed that it is working with Ascension, one of the nation’s largest health systems in a project that will involve the health data of millions of Americans.  Google and Ascension have partnered in a project to store and analyze patient data with the intended goal of using Google’s artificial intelligence tools to enhance patient care and medical decision making.  As a result of this partnership, it has been estimated that over 100 Google employees may have access to sensitive patient data such as name, birth date, diagnoses and treatments.  Such access by Google to millions of patient’s health data has resulted in some concern over how the data will be protected, including a recently announced inquiry into the relationship by the U.S. Department of Health and Human Services’ Office of Civil Rights (“OCR”).  OCR has stated that it “would like to learn more information about this mass collection of individuals’ medical records with respect to the implication for patient privacy under HIPAA.”  Ascension has said that the project with Google has complied with the law and followed the healthcare organization’s “strict requirements for data handling.” 

We will continue to follow this important story.  Several other tech companies continue to try to gain a bigger share of America’s health care market, which will all have to be balanced with patient data privacy and security concerns.

Hospital Price Transparency Requirements

Posted by Danielle Sapega on November 19, 2019
CMS / No Comments

CMS finalized the Outpatient Prospective Payment System hospital price transparency rules on November 15, 2019. As of January 1, 2021, hospitals will have to publicly post (and update annually) two sets of data: first, a comprehensive list of standard charges for items services offered by the hospital, and second, a consumer-friendly list of 300 “shoppable” services, including 70 selected by the Centers for Medicare and Medicaid Services (“CMS”).

The first transparency requirement states that each hospital operating within the United States must establish and make public a list of the hospital’s standard charges for items and services provided by the hospital, including diagnosis-related groups (DRGs). Standard charge is defined as “the regular rate established by the hospital for an item or service provided to a specific group of paying patients. This includes: (i) gross charge, (ii) payer-specific negotiated charge, (iii) de-identified minimum negotiated charge, (iv) de-identified maximum negotiated charge, and (v) discounted cash price.” Items and services is defined as “all items and services, including individual items and services and service packages, that could be provided by a hospital to a patient in connection with an inpatient admission or an outpatient department visit for which the hospital has established a standard charge.” Examples include supplies and procedures and room and board.

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Price Transparency Rules are Here

Posted by Robert A. Chu on November 15, 2019
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CMS today issued its Price Transparency Requirements for Hospitals Final Rule, which will go into effect on January 1, 2021. (CMS had initially proposed that it go into effect January 1, 2020, but agreed that that deadline was too “challenging”).  Hospitals will be required to post on a public website, among other things, the “payer-specific negotiated charges” for each payer and plan.  These negotiated rates have typically been subject to lock and key treatment through confidentiality agreements.  Noncompliance with the rules may result in corrective action plans (CAPs), civil monetary penalties (CMPs) of $300 per day (indexed to an inflation factor), and a public notice of the CMP on a CMS website. Under the rules, CMS can issue “subsequent” CMPs for continued noncompliance. A link to the Final Rule is here: https://www.hhs.gov/sites/default/files/cms-1717-f2.pdf.

The Trump Administration has also issued a proposed “Transparency in Coverage” rule that would require plans to give consumers access to a tool providing an estimate of their cost-sharing liability for all covered healthcare items and services.  It would also require plans to list on a website their negotiated rates for in-network providers and the allowed amounts paid for out-of-network providers.  A link to the Proposed Rule is here: https://www.hhs.gov/sites/default/files/cms-9915-p.pdf

We will continue to analyze and monitor these rules.  Stay tuned.

CMS Guidance on “Shared Space” – Comment Period Closing July 2, 2019

Posted by Danielle Sapega on June 24, 2019
CMS / No Comments

CMS recently issued long-awaited draft guidance on hospital co-location with other hospitals or healthcare facilities, providing some potential insight on the otherwise ambiguous prohibition on “shared space.” This prohibition loosely stems from the requirement that a Medicare participating hospital is evaluated “as a whole” for compliance with the Conditions of Participation (“CoP”), among other state and federal regulatory requirements. Previously, it was believed that the provider based regulations at 42 C.F.R. § 413.65 governed this prohibition (this section was cited in a 2016 memorandum from the Pennsylvania Department of Health), but the CMS guidance did not cite this particular section.

In recent years, CMS has started to crack down on provider based hospital departments that physically share space with non licensed or separately owned hospital facilities, generally prohibiting shared staff, waiting rooms, check-in desks, patient bathrooms, and other similar items and costs. Although the prohibition was not absolute (CMS had permitted certain things to be shared, such as staff lounges and shared main lobbies), hospitals that sought to attain and maintain compliance struggled with the lack of clear guidance from CMS, and had to rely largely on word of mouth, occasional information distributed by State Survey Agencies, or even citations received if the hospital was caught with prohibited shared space or staffing. This was especially troubling in light of the fact that remediation potentially involved large scale, expensive construction and a hiring and staffing model revamp, among other mandatory modifications.

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