Legal Insights and Perspectives for the Healthcare Industry

Proposed reforms to patent subject matter eligibility in the United States are once again making headlines. With advancements in medical device technologies and the increasing integration of software, patent eligibility considerations implicate a growing realm of medical devices. In a recent LawFlash, we address a draft bill in the US Congress that could broaden the range of patent eligible subject matter with implications for stronger commercialization of medical device technologies in the United States. We also discuss two recent letters to the US Senate that crystalize the growing debate over expanding patent eligibility with possible effects on medical device innovation, affordability, and availability.

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We address more than a dozen key proposals from the CMS outpatient prospective payment system (OPPS) and ambulatory surgical center payment systems proposed rule in a recent LawFlash. Chief among them is the agency’s bold new proposal for a broad price transparency program. Other notable proposals include continuing payment reductions for 340B drugs and grandfathered off-campus provider-based departments, both the subject of pending litigation in federal court. CMS is soliciting public input on a multitude of proposals from this rule, and comments are due September 27, 2019. Hospitals will want to carefully assess these changes and consider submitting comments before these proposals become final rules.

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We hosted a very informative Fast Break session last week on complex FCA issues. If you weren't able to join, the session was led by Katie McDermott and Matt Hogan, who are both authorities in False Claims Act (FCA) litigation. Understanding the complex dynamics for dealing with both the US Department of Justice (DOJ) and qui tam relators, Katie and Matt led us through the minute details of relator litigation, declined qui tams, and partial interventions, just to name a few things.

Among the overarching issues we discussed, coming on the heels of the US Supreme Court’s Cochise decision, is the Court’s seemingly renewed interest in the FCA and the possibility of statutory amendments to the FCA to balance out many of the, as Katie termed it, “procedural inequities” that now exist when a healthcare organization is an FCA defendant. Katie and Matt also discussed recent DOJ pronouncements about their FCA enforcement procedures and priorities, highlighting that the FCA remains the most significant overarching risk area for healthcare stakeholders.

Coming on the heels of the FCC’s recently proposed $100 million Connected Care Program to fund telehealth-based connections between healthcare providers and patients, and continuing its recognition of the critical role telehealth plays in the healthcare industry, the FCC recently voted to adopt an extensive order overhauling the Rural Health Care (RHC) Program. The RHC Program has been supportive of telehealth services for some time, providing subsidies to rural healthcare providers to lower the expense of their broadband services, including monthly telecom and broadband recurring costs, and funding for special construction and network equipment where the healthcare provider otherwise lacks access to telecom or broadband facilities. (Read our prior blog on the FCC’s proposal.

The RHC Program has significant funding—over $571 million—and this reform is designed to streamline certain procedures, provide priority to rural healthcare in areas that are medically underserved, simplify the calculation of amounts that healthcare providers pay and service providers receive, reform the competitive bidding process, and improve the application process. The FCC intends for these comprehensive program changes to support vital telemedicine and telehealth services in rural communities while promoting efficiency and transparency and avoiding waste, fraud, and abuse.

Celebrating the 50th anniversary of Apollo 11’s manned mission to the moon, Health Law Scan binged on a month of TV interviews and videos from when humans first walked on the lunar surface. As Health Law Scan dreamed of galaxies far away, the gravitational pull of earthly demands diverted our attention back to recent healthcare developments. We began July with an analysis of an executive order that previewed the administration’s intent to compel hospitals and insurers to disclose contracted rates to consumers. We followed that with key takeaways from the AHLA Annual Meeting on how new tech is changing healthcare. Moving further into the month, we addressed the CMS Patients Over Paperwork RFI, what the new OIG reports portend for the hospice industry, the FCC’s proposed $100 million telehealth pilot fund, and an immigration update on what the August 2019 visa bulletin means for healthcare. And going boldly where no Fast Break has gone before, we recapped June’s webinar on recent DOJ compliance guidance from our first live video broadcast! So if you’ve been busy in a distant galaxy, or just hurtling toward the final frontier, we’ve powered up an assemblage of out of this world blog posts for you here.

Two OIG inspection reports detailing the results of onsite hospice surveys during a five-year period ending three years ago in 2016 build on the body of hospice industry evaluations conducted by the OIG, garnering significant negative press attention. Many in the hospice industry believe the OIG reports lack balance and focus excessively on the negative findings associated with a small minority of hospices. In light of CMS’s concurrent initiative to put “patients over paperwork” and reduce regulatory burdens on providers, OIG’s call for enhanced regulatory oversight and expanded reporting requirements for hospice may strike some industry watchers as out of step with the administration’s efforts to reduce unnecessary red tape, but OIG sticks to its watchdog role.

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Nearly 20% of healthcare workers are immigrants according to the results of a June 2019 study that underscores the major contributions immigrants make to the US healthcare system. To learn more about how the US Department of State is regulating immigrant visa availability and adjusting the flow of status adjustments and consular immigrant visa application filings and approvals, please see our recent alert on the August 2019 visa bulletin.

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For those providers—and there are more than a few—that believe the administrative and regulatory burdens associated with participating in the Medicare and Medicaid programs negatively affect their ability to furnish high-quality, cost-effective healthcare, now is the time to make your voice heard! On June 11, the Centers for Medicare & Medicaid Services (CMS) and the US Department of Treasury released a request for information (RFI) on Reducing Administrative Burden to Put Patients Over Paperwork. The RFI invites patients, their families, the medical community, and other healthcare stakeholders to submit comments on how CMS can reduce administrative, regulatory, and subregulatory burdens on providers. The goal of the initiative is to clear away needlessly complex, outdated, or duplicative requirements, allowing practitioners to spend more time with patients and less time on cutting through the red tape.

We had a really fun and insightful edition of our Fast Break webinar series in June. If you didn’t get a chance to join in, the session featured Jonelle Saunders and Jake Harper discussing recent compliance guidance issued by the US Department of Justice (DOJ). Jonelle explained the reasons why the DOJ issued the guidance, how the guidance works, and some practical tips for healthcare providers in assessing their own compliance programs. The guidance can have a major impact on settlement dynamics for defendants in False Claims Act (FCA) cases and other matters, so it is important to understand the DOJ’s thinking on compliance.

We finally got to appear on camera for this Fast Break, which was an interesting experience (although a little more nerve-wracking than usual). It gave us the chance to better interact with our attendees, who asked some great questions on the topic.

The FCC recently issued draft rules for a pilot funding program to enhance broadband service for connected care telehealth purposes, reflecting the agency’s recognition of the increasingly critical role that telehealth plays in the healthcare industry. The proposal for a $100 million fund to use advanced telehealth technologies to reach low-income Americans and veterans will be of great interest to many healthcare companies.