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…

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The Telehealth Cost Wars

Posted by Health Law Informer Author on March 22, 2017
Telehealth / No Comments

How to properly evaluate and weigh cost savings in health care has long been a controversial subject—perhaps nowhere more so than when technology-enabled health care is evaluated. A recent study is a case in point. The journal Health Affairs recently published a study that has caused quite a stir in the telehealth community. Without getting into details regarding methodology and results—best left for a more in-depth article—the study acknowledges that reimbursement for direct-to-consumer (“DTC”) telehealth visits are lower than would be the case for in-person physician or ED visits. However, the study raised two concerns. First, the researchers posited that there could be increased spending for DTC visits “if the direct-to-consumer telehealth visit is more likely to result in follow-up appointments, testing, or prescriptions, compared to similar visits to other settings.” Second, the researchers believe that DTC physicians “may be more likely to recommend that patients have a subsequent in-person visit with a provider.”  The basis for these concerns is not made entirely clear, and quite frankly doesn’t square with my discussions with DTC telehealth stakeholders.

The study also broadly concludes that DTC telehealth may lead to increased utilization as patients will seek care for illnesses for which they would not have sought care had telehealth not been available. More to the point, the researchers calculated that about 88 percent of telehealth usage represents new utilization. In other words, only 12 percent of DTC telehealth usage replaced or substituted visits to other providers. Ultimately, the study argues that DTC telehealth may increase access by making care more convenient for some individuals, and, thereby, may also increase utilization and health care spending. Continue reading…

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Telemedicine Liability – The Real Numbers

Posted by Health Law Informer Author on February 28, 2017
Telemedicine / No Comments

stethoscope keyboard and phoneAmidst all the interesting legal and regulatory issues implicated by telemedicine, one issue less discussed is the potential liability exposure associated with telemedicine. Many critics have argued that the nature of how telemedicine services are provided will naturally lead to increased risk for malpractice. Available data does not support the argument—at least not yet.

While not a lot of data exists, the Physician Insurers Association of America (“PIAA”) published a July 2015 article comparing telephone treatment medical professional liability (“MPL”) claims versus overall MPL claims reflected in the PIAA Data Sharing Project (“DSP”)—a very large database of MPL claims. Here are the numbers:

  • Of the 94,228 total claims in the DSP during the period from 2004-2013, a total of only 196 claims were linked with telephone treatment.
  • Of those 196 reported claims, 56 resulted in some form of claim payment.
  • The total indemnity loss related to telephone treatment was only $17 million, compared to $8 billion for the total of all MPL losses.
  • Telephone treatment claims represented only about 0.21% of all MPL losses.
  • The average indemnity loss was also lower for telephone treatment at $303,691, compared to $328,815 for all MPL claims within the DSP.

Continue reading…

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The Critical Role of Telemedicine in the Addiction Crisis

Posted by Health Law Informer Author on February 17, 2017
Telemedicine / No Comments

doctor at laptopTelemedicine is now mainstream. Surprisingly, however, one area in which telemedicine has not been used to its fullest capability is drug addiction treatment. As you are aware, the country is in the midst of an addiction crisis.  The statistics are daunting:

Adding to the woeful statistics are the fairly dismal rates of addiction recovery—assuming that such recovery services are even available. Relapse rates are over 50 percent for certain drugs, and higher for opioid addicts. According to one survey, almost 9 percent of the population needs treatment but only 1 percent actually receives it. The National Institute on Drug Abuse notes that effective substance abuse treatment combines treatment medications with behavioral therapy—and traditional treatment is limited by the availability of treatment professionals who often are not available outside of in-person care settings. Continue reading…

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FSMB and ATA Documents Shed Light on States’ Views on Telemedicine

Posted by Health Law Informer Author on February 16, 2017
Telemedicine / No Comments

stack of official documentsOver the past year, the Federation of State Medical Boards (FSMB) and the American Telemedicine Association (ATA) have published documents regarding telemedicine that shed some new light on how state regulatory bodies view telemedicine. Taken together, the documents are generally cause for optimism underscoring the trend towards greater acceptance of telemedicine—but there are some notes of caution as well. By way of quick background, the FSMB represents 70 state medical and osteopathic boards and helps support member boards around the country. The ATA is the largest telemedicine-focused trade association made up of industry leaders and health care stakeholders.

FSMB Survey

According to a survey report issued in December 2016, telemedicine is currently the most important regulatory topic to state medical boards. The survey was completed by 57 of the 70 medical and osteopathic medical boards in the country. Interestingly, 75 percent of boards chose telemedicine in their survey responses as one of the most important topics “making it the topic impacting the largest number of boards.” Seventy percent chose resources regarding opioid prescription. The five most important issues were:

  • Telemedicine;
  • Opioid prescribing (resources related to);
  • Physician licensure compact;
  • Physician re-entry to practice; and
  • Medical marijuana.

Surprising in these survey results is the degree to which telemedicine continues to be top of mind for state boards despite the slew of state activity that generally facilitates greater use of telemedicine (discussed more below in the ATA Gaps Report section). A reasonable explanation is that despite all the recent progress in law and policy, many state boards continue to be uneasy about telemedicine.  What that ultimately means for the industry will bear watching. Continue reading…

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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.

 

 

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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…

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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…

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House Passes 21st Century Cures Act

Posted by Health Law Informer Author 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.

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Arbitration Agreements in Nursing Homes

Posted by Health Law Informer Author on October 04, 2016
CMS / No Comments

elderly man in wheelchairIn a final rule published today in the federal register (“Final Rule”), CMS announced numerous changes to the consolidated Medicare and Medicaid requirements for participation for long term care (LTC) facilities (42 CFR part 483, subpart B), which take effect on November 28, 2016 (see the March 7, 2016 blog for information about the July 16, 2015 proposed rule (“Proposed Rule”)). Much to the satisfaction of elder care advocates, the Final Rule provides that nursing homes may no longer require prospective nursing home residents to agree to binding arbitration. This strikes a blow at LTC facilities, which generally used arbitration as a tool to avoid incurring the onerous costs associated with litigation.

CMS’ position in the final rule isn’t shocking as it had expressed concern about the use of arbitration agreements in nursing homes in its Proposed Rule. Although no longer permissible for LTC facilities to use as a condition of admission, according to Andy Slavitt, CMS’ Acting Administrator, and Kate Goodrich, Director of the Center for Clinical Standards & Quality, “facilities and residents will still be able to use arbitration on a voluntary basis at the time a dispute arises.” However, such agreements will still need to be “clearly explained” to residents.

Nursing homes that have traditionally asked residents to sign binding arbitration agreements should revisit their admissions processes and implement revised policies and procedures to ensure compliance with the Final Rule, so that, beginning November 28, 2016, residents at such LTC facilities are no longer required to agree to binding arbitration. LTC facilities may also consider revising their policies and procedures to incorporate recommending the use of arbitration to residents following disputes that may arise, and to ensure that any such recommendations are clearly explained to their residents.

For more information regarding the voluntary use of arbitration agreements in the nursing home context, contact J. Nicole Martin, Dana Petrillo or any member of Cozen O’Connor’s health care law team.

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