Category: Health

Alabama Enacts New Telemedicine Law

Alabama Governor Kay Ivey recently signed SB 272 into law, setting forth telemedicine practice standards and abolishing Alabama’s previous “special purpose license” that allowed physicians licensed in other states to practice across state lines into Alabama. The law is effective July 11, 2022.

The law creates a new article in the Code of Alabama (Sections 34-24-701 through 34-24-707 of Chapter 24, Title 34). The statutory language is lengthy, but the key provisions are summarized below.

Medical License

Unless the physician meets an exception to licensure (e.g., peer-to-peer consultations, irregular or infrequent services), a physician must obtain either a full Alabama medical license or a license via the Interstate Medical Licensure Compact in order to provide “telehealth medical services” to a patient located in Alabama.

  • Telehealth medical services means “[d]igital health, telehealth, telemedicine, and the applicable technologies and devices used in the delivery of telehealth. The term does not include incidental communications between a patient and a physician.
  • The term “irregular or infrequent” services refers to “telehealth medical services” occurring less than 10 days in a calendar year or involving fewer than 10 patients in a calendar year.

Defined Terms and Allowable Modalities

  • Telehealth is defined as “[t]he use of electronic and telecommunications technologies, including devices used for digital health, asynchronous and synchronous communications, or other methods, to support a range of medical care and public health services.”
  • Telemedicine is defined as “[a] form of telehealth referring to the provision of medical services by a physician at a distant site to a patient at an originating site via asynchronous or synchronous communications, or other devices that may adequately facilitate and support the appropriate delivery of care.” The term includes digital health, but does not include incidental communications between a patient and a physician.
  • Digital Health is defined as “[t]he delivery of health care services, patient education communications, or public health information via software applications, consumer devices, or other digital media.”
  • Asynchronous is defined as “[t]he electronic exchange of health care documents, images, and information that does not occur in real time, including, but not limited to, the collection and transmission of medical records, clinical data, or laboratory results.”
  • Synchronous is defined as “[t]he real-time exchange of medical information or provision of care between a patient and a physician via audio/visual technologies, audio only technologies, or other means.”

Physician-Patient Relationship

A physician-patient relationship may be formed via telehealth without a prior in-person exam.

Telemedicine Prescribing of Medications and Controlled Substances

A practitioner may prescribe a legend drug, medical supplies, or a controlled substance to a patient via telehealth. However, a prescription for a controlled substance may only be issued if:

  1. The telehealth visit includes synchronous audio or audio-visual communication using HIPAA compliant equipment;
  2. The practitioner has had at least one in-person encounter with the patient within the preceding 12 months; and
  3. The practitioner has established a legitimate medical purpose for issuing the prescription within the preceding 12 months.

In-Person Visit for Unresolved Medical Condition

If a physician or practice group provides telehealth medical services more than 4 times in a 12-month period to the same patient for the same medical condition without resolution, the physician must either see the patient in-person within 12 months or refer the patient to a physician who can provide the in-person care within 12 months. This in-person visit requirement does not apply to the provision of mental health services.

The Alabama Board of Medical Examiners and the Alabama Medical Licensure Commission are currently developing administrative rules in accordance with the new law.

Article By Kristen A. Murphy and Jacqueline N. Acosta of Foley & Lardner LLP

For more health law legal news, click here to visit the National Law Review.

© 2022 Foley & Lardner LLP

Antitrust Enforcers’ “Second Listening” Forum On Merger Reform Highlights Issues In The Healthcare Industry

In March of this year the Antitrust Division of the U.S. Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) jointly announced a series of “listening forums” that would help gather real world input from participants in key industry segments on possible reforms to the antitrust regulations pertaining to mergers and acquisitions.1 Co-led by DOJ Deputy Assistant Attorney General (“DAAG”) Doha Mekke and FTC Chairperson Lina Khan, the second of the four announced forums, focusing on healthcare, was held on April 14, 2022. 2  In addition to DAAG Mekki and Chairperson Khan, the program included eight panelists that provided perspectives from nurses, doctors, patients, pharmacists and small businesses. 3

DAAG Mekki started off the discussion by reaffirming the antitrust enforcement agencies’ collective commitment that “healthcare markets remain competitive” because it “is essential to our livelihood or the livelihood of the nation.” Mekki referenced ongoing work by the agencies in the healthcare field, including recent DOJ enforcement actions. 4

The healthcare panelists highlighted several ongoing issues in the industry, such as the adverse impact of care due to post-merger hospital staff downsizing that was tied to merger-specific efficiencies, reduced options to tertiary care, higher healthcare costs for patients, and unfair competition in the pharmaceutical and small business markets, and other impacts in the research and labor markets.

Chairperson Khan indicated that the comments resonated with the concerns that the FTC had in the hospital, pharmacy benefits management, and pharmacy industries. Ms. Khan also suggested a renewed interest in examining the potential anticompetitive effects of vertical integration in addition to horizontal mergers and acquisitions, which is consistent with the FTC’s position when it indicated that it wanted to revisit this issue while withdrawing the Vertical Merger Guidelines in 2021. Khan also reaffirmed the importance of examining anticompetitive effects in the labor market. All of these issues, according to Khan, are important in assessing how the antitrust laws can be used to improve the quality of healthcare for patients.

The forum ended with some of the more than two hundred public comments, most of which echoed similar concerns raised by the panelists in addition to concerns such as disparities in hospital-physician group contracting situations and racial disparities in access to healthcare as a result of healthcare system mergers.

Once again, all signs point toward an unprecedented time in antitrust enforcement in the healthcare industry. Accordingly, it is important that healthcare companies revisit, revise, and implement best practices with regard to their respective antitrust compliance programs. A proactive, as opposed to a reactive, approach would provide companies the best risk management strategy. It is also important to engage antitrust counsel early in potential transactions to assess how the antitrust agencies may view the deal.

The DOJ and FTC Listening Forums continue with Media and Entertainment, which was held on April 27, 2022, and the final one on Technology, which will be held on May 12, 2022. Click here to download the alert. 

FOOTNOTES

1    “Forums to focus on markets commonly impacted by mergers: food and agriculture, health care, media and entertainment, and technology,” March 17, 2022, available at: https://www.ftc.gov/news-events/news/press-releases/2022/03/ftc-justice-department-launch-listening-forums-firsthand-effects-mergers-acquisitions

2   See “Antitrust Enforcers’ First ‘Listening Forum’ On Merger Reform Highlights Ongoing Concerns in the Food and Agriculture Industry” May 9, 2022, available at: https://www.polsinelli.com/intelligence/antitrust-forum-highlights-concerns-in-food-and-ag

3 Full transcript of forum available at: https://www.ftc.gov/system/files/ftc_gov/pdf/FTC-DOJ-Listening-Forum-%20Health-Care-Transcript.pdf. It should be noted that Assistant Attorney General Jonathan Kanter did make an appearance at the end of the session, reiterating the importance of this forum.

4    See “DOJ Faces Two Strikeouts in First Health Care Wage-Fixing and ‘No Poach’ Prosecutions,” April 20, 2022, available at: https://www.polsinelli.com/intelligence/doj-faces-two-strikeouts-in-first-health-care

© Polsinelli PC, Polsinelli LLP in California
Article By Arindam Kar with Polsinelli PC.
For more articles about antitrust law, visit the NLR Antitrust law section.

A Simple Guide to Exactech Hip, Knee and Ankle Replacement Lawsuits and Settlements

How Do I Know If I Have a Exactech Claim?

STEP 1: Obtain Medical Records

We have written extensively about the different types of defects in certain Exactech products, and the various causes of those defects, particularly to the polyethylene (plastic) liners of those products. Regardless of whether you are dealing with a hip, knee or ankle replacement, the first step in figuring out whether you have a potential claim is to confirm which type of Exactech product (and the components of that product) that you had implanted.

There is a simple way to do that. Whenever doctors use a medical implant or device, like a hip, knee or ankle implant, it comes in its own shiny new box (as you can imagine, a lot of marketing goes into the packaging of these extremely expensive products).

The box has stickers on it that specifically identify everything about the product (manufacturer, model, lot number, etc.). The surgeon takes the sticker off of the box and attaches it to the Operative Report. Consisting of only a few pages, the Operative Report is a basic summary of your joint replacement operation. The stickers are usually attached to the last page of the Operative Report. You can go to your medical provider and ask for your Operative Report (this should only take a couple of days to receive), or you can retain an attorney to formally request your operative report (this will take a few weeks).

Helpful hint: medical providers are only responsible for keeping records for a certain amount of time. If your operation happened a relatively long time ago (longer than seven years), it will be much more difficult to get the records.

STEP 2: Identify the Exactech Implant

Now that you have a copy of your Operative Report with the identifying stickers, you need to compare your Exactech implant to a list of Exactech products that are recalled, alleged to be defective or are otherwise part of the pending nationwide litigations.

Again, some of the recalled product liners are subject to premature deterioration and failure because the packaging exposed them to oxygen, and some of the (hip) liners just did not last as long as they should have. As these products have been used in tens of thousands of procedures over many years, this obviously caused, and continues to cause, serious problems in patients – including osteolysis, or bone loss.

Exactech has a website that allows you to search your implant in its recalled products list. The website also contains the recall and warning letters that should have been sent to your doctors. Finally, the Exactech website encourages patients to submit claims for defective implants through a company hired by Exactech, named Broadspire.

STEP 3: Is Revision Necessary?

Now that you have identified your Exactech implant as one of the products that are alleged to be defective and are part of the pending nationwide litigations, you have to be able to show you suffered damages that require a revision of the implant. In this case, “revision” basically means that a doctor has found it necessary to go in and try to fix or replace part or all of your defective Exactech implant.

Unfortunately, every surgical procedure has a risk of complications. Just experiencing an injury, such as an infection at the surgical site, is not uncommon and does not always mean that your injuries are attributable to a defective Exactech product. So, you will also have to be able to show that the failure of your implant was caused by the premature breakdown and failure of the plastic liner of the implant.

STEP 4: Contact an Attorney

Now that you have determined that you have a defective Exactech implant that required (or will require) revision, you will want to get some legal advice. Two things to keep in mind: 1) make sure to talk to a law firm that specializes in Exactech hip, knee and ankle litigation; and 2) do not wait – there are different deadlines and statutes of limitations that apply to your claim. Do your homework and research the firm you will be working with – there is a good chance it will not be the same lawyer that handled your last speeding ticket, or one of the 800 numbers that flash across your television screen late at night. Put this on the top of your pile of things to do. Only bad things can happen if you wait too long to pursue a claim.

COPYRIGHT © 2022, STARK & STARK
For more about personal injury cases, visit the NLR Litigation section.

COVID-19 Healthcare Enforcement Actions to Increase in 2022 and Beyond

“The Department remains committed to using every available federal tool—including criminal, civil, and administrative actions—to combat and prevent COVID-19 related fraud. We will continue to hold accountable those who seek to exploit the pandemic for personal gain, to protect vulnerable populations, and to safeguard the integrity of taxpayer-funded programs”

US Attorney General Merrick Garland – March 10, 2022, Remarks

The Biden Administration, US Department of Justice (DOJ), US Department of Health and Human Services Office of Inspector General (HHS-OIG), and other federal agencies have prioritized prosecuting COVID-19-related fraud since the pandemic began. Although the United States appears to be finally emerging from the pandemic, the government’s pandemic-related enforcement actions are here to stay for the foreseeable future. DOJ has made clear that the government’s COVID-19 enforcement efforts will accelerate, with a more significant focus on complex healthcare fraud cases and civil actions under the False Claims Act (FCA). As the federal government continues to devote additional resources towards its pandemic-related enforcement efforts, healthcare companies, hospital systems and providers should prepare for increased scrutiny.

Additional Resources Devoted to COVID-19 Fraud Enforcement Efforts

DOJ and other federal agencies have already devoted an unprecedented amount of resources to investigating and prosecuting pandemic-related fraud cases. These extensive efforts have led to immediate results. To date, DOJ has brought pandemic-related criminal charges against more than 1,000 individuals with the total alleged fraud losses exceeding $1 billion, and has seized more than $1.2 billion in fraudulently obtained relief funds.

DOJ’s pandemic-enforcement efforts show no sign of slowing down anytime soon. Less than a year after US Attorney General (AG) Merrick Garland established the COVID-19 Fraud Enforcement Task Force, the Biden administration announced that DOJ would appoint a chief prosecutor to expand on the Task Force’s “already robust efforts,” to focus on “most egregious forms of pandemic fraud” and to target particularly complex fraud schemes.

On March 10, 2022, DOJ announced that Kevin Chambers has been appointed as DOJ’s director for COVID-19 fraud enforcement. During his introductory remarks, Chambers said that DOJ would be “redoubling [its] efforts to identify pandemic fraud, to charge and prosecute those individuals responsible for it and whenever possible, to recover funds stolen from the American people.” He also indicated that DOJ would use “new tools” it has developed since the start of the pandemic to investigate such fraud.

In a March 2, 2022, speech before the American Bar Association’s Annual National Institute on White Collar Crime, AG Garland also announced that the Biden Administration will seek an additional $36.5 million in the 2022 budget for DOJ to “bolster efforts to combat pandemic-related fraud.” As evidence of this point, DOJ plans to hire 120 new prosecutors and 900 new Federal Bureau of Investigation agents who will focus on white-collar crime.

DOJ and HHS-OIG to Increasingly Focus on FCA Cases

For the past two years, officials from DOJ and HHS-OIG have identified civil and criminal healthcare fraud relating to COVID-19 as a high priority. As the effects of the pandemic subside, COVID-19-related civil enforcement actions targeting healthcare providers and healthcare companies seem set to increase.

During remarks at the Federal Bar Association’s annual Qui Tam Conference in February 2022, Gregory Demske, chief counsel to the inspector general for HHS-OIG, emphasized that COVID-19 remains a key enforcement priority. Demske indicated that HHS-OIG is focused on the use of COVID-19 to bill for medically unnecessary services, and fraud in connection with HHS’s Provider Relief Fund (PRF) and Uninsured Relief Fund. Demske also confirmed that HHS-OIG remains intensely focused on fraud in connection with telehealth services, the use of which increased exponentially during the pandemic. And, in March 2022, AG Garland reiterated that DOJ will use “every available federal tool—including criminal, civil, and administrative actions—to combat and prevent COVID-19 related fraud.”

The majority of pandemic-related healthcare enforcement actions to date have been criminal prosecutions involving truly blatant instances of fraud and abuse. Going forward, civil and administrative actions likely will be used to pursue cases that turn on lower mens rea requirements or involve more complex regulatory issues. These civil actions will include qui tam actions filed by whistleblowers, as well as FCA cases initiated directly by the DOJ.

In 2021, DOJ recovered more than $5 billion in connection with FCA cases involving the healthcare industry. Given the unprecedented amount of government funds expended to combat the COVID-19 pandemic, DOJ and HHS-OIG will undoubtedly rely on the FCA to maximize the government’s financial recovery. DOJ has already reached FCA settlements in several Paycheck Protection Program cases. It is only a matter of time before we see similar FCA investigations, complaints and settlements focused on relief funding to healthcare providers.

Pandemic-Related Healthcare Priorities

HHS’s PRF

The PRF was created as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act to provide direct payments to “eligible health care providers for health care-related expenses [and] lost revenues that are attributable to coronavirus.” More than $140 billion has been disbursed to hospitals and healthcare providers under the PRF, which is administered by the Health Resources & Services Administration (HRSA).

Payments under the PRF are subject to specific terms and conditions. To retain PRF disbursements, providers must attest to “ongoing compliance” with these requirements and acknowledge that their “full compliance with all Terms and Conditions is material to the Secretary’s decision to disburse funds.” Notwithstanding ongoing concerns and confusion regarding the PRF program requirements, any noncompliance with the terms and conditions could result in criminal, civil and administrative enforcement actions. As recently as March 3, 2022, AG Garland identified fraud in connection with the PRF as a key DOJ enforcement priority.

To date, the Healthcare Fraud Unit of DOJ’s Criminal Division has already brought criminal charges against nine individuals for fraud relating to the PRF. These criminal cases, however, have almost exclusively focused on egregious allegations of fraud and abuses, such as misappropriating PRF disbursements and using the money for personal expenses. For example, in September 2021, DOJ charged five individuals with using PRF payments to gamble at Las Vegas casinos and purchase luxury cars.

DOJ, however, has long indicated that the FCA will also play a “significant role” in DOJ’s PRF enforcement efforts. It is now just a matter of time before such civil investigations and settlements emerge.

HRSA’s stated oversight plan includes post-payment analysis and review to determine whether HHS distributed PRF payments to eligible providers in the correct amounts; audits to assess whether recipients used the funds in accordance with laws, guidance, and terms and conditions; and the recovery of overpayments and unused or improperly used payments. Among other things, HRSA and HHS-OIG likely will evaluate ownership changes, double counting reimbursed expenses and losses, and compliance with the balanced billing requirements.

PRF oversight and enforcement actions have been delayed partly because of program complexities and extended reporting timelines. For example, the first report from PRF recipients on use of funds was not due until the end of 2021. Depending on the date funds were received, PRF recipients may have no reporting obligations through 2023. Entities that expended more than $750,000 in federal awards, including PRF payments, also must obtain an independent audit examining their financial statements; internal controls; and compliance with applicable statutes, regulations and program requirements. These independent audits of PRF payments must be submitted to the Federal Audit Clearinghouse, for nonprofit organizations, or the HRSA Division of Financial Integrity, for for-profit “commercial” organizations. Recipients also may be subject to separate audits by HHS, HHS-OIG or the Pandemic Response Accountability Committee to review copies of records and cost documentation and to ensure compliance with the applicable terms and conditions.

Finally, DOJ and HHS-OIG have increasingly relied on sophisticated data analytics to drive their healthcare enforcement efforts generally. Now that the first round of reports containing specific PRF data certifications are available to HRSA and HHS-OIG, we expect to see the use of such analytics, in conjunction with all the other available information, in connection with PRF enforcement.

Telehealth

Telehealth use expanded exponentially during the pandemic. A March 2022 HHS-OIG report showed that during the first year of the pandemic, more than 28 million Medicare beneficiaries (approximately 43% of all Medicare beneficiaries) used telehealth services—a “dramatic increase from the prior year” in which only 341,000 beneficiaries used telehealth. This increase was largely the result of HHS temporarily waiving statutory and regulatory requirements related to telehealth to allow Medicare beneficiaries to obtain expanded telehealth services.

Telehealth has been at the forefront of DOJ’s healthcare enforcement efforts for years now. For example, DOJ’s 2021 nationwide healthcare enforcement action included criminal charges against dozens of individuals for telehealth fraud schemes involving more than $1.1 billion in alleged loses. The majority of these telehealth enforcement actions to date have involved the use of telehealth to engage in traditional fraud healthcare schemes, such as illegal kickbacks and billing for medically unnecessary services and equipment.

DOJ, however, has increasingly pursued criminal enforcement actions directly related to the telehealth waivers HHS issued in response to the pandemic. For example, in November 2021, a defendant was sentenced to 82 months in prison for participating in a $73 million telehealth fraud scheme. The defendant owned laboratories that provided genetic testing and had paid his coconspirators to arrange for telehealth providers to order medically unnecessary genetic tests. The telehealth providers were not actually treating the beneficiaries, did not use the test results and often never even conducted the telemedicine consultation. Although this was primarily a traditional Anti-Kickback Statute/medical necessity case, DOJ also charged the defendant with using the COVID-19-related telehealth waivers to submit more than $1 million in false claims for sham telemedicine visits.

Similar criminal prosecutions and civil actions relating to the expanded telehealth waivers and sham telehealth encounters can be expected in the future. DOJ and HHS-OIG will likely focus on telehealth visits that resulted in claims for services and equipment with particularly high reimbursement rates, such as genetic testing and durable medical equipment. DOJ and HHS-OIG likely will use data analytics to focus on instances in which telehealth services were billed by providers with whom the beneficiary did not previously have a relationship.

Improper Billing Schemes

DOJ has also pursued criminal cases involving traditional healthcare fraud schemes that sought to take advantage of the COVID-19 pandemic. For example, in May 2021, DOJ announced criminal charges against numerous individuals who were improperly bundling COVID-19 tests with other more expensive laboratory tests, such as genetic testing, allergy testing and respiratory pathogen panel testing. DOJ has likewise pursued criminal cases in which defendants improperly used COVID-19 “emergency override” billing codes to circumvent preauthorization requirements and bill Medicare for expensive medications and treatments. Any improper billing schemes that relate to the pandemic will continue to be a focus of criminal and civil enforcement efforts going forward.

Key Takeaways and Recommendations

DOJ, HHS-OIG and other federal agencies remain focused on pursuing healthcare fraud relating to the COVID-19 pandemic. The best way for hospitals, health systems and other healthcare companies and providers to prepare for this increased enforcement activity and scrutiny is to ensure that they have a robust compliance program in place.

There is no one-size-fits-all approach to compliance, but companies can take several proactive and practical steps to minimize their enforcement risk:

  • Monitor federal and state regulatory and statutory changes. The rules, regulations and guidance relating to the COVID-19 pandemic, including for the PRF and expanded telehealth waivers, have repeatedly changed over the past two years and continue to evolve. Monitoring such changes will not only help prevent enforcement actions, but a company’s reasonable and good faith efforts to interpret and follow such rules and regulations can be a powerful defense should an investigation arise, as discussed in connection with the Allergan case, above. Further to that point, where regulatory requirements and associated guidance is ambiguous, a good documentary record of the basis for your entity’s interpretation of the rules is critical.
  • Incorporate data analytics into your compliance program. DOJ and HHS-OIG continue to rely heavily on sophisticated data analytics, including artificial intelligence, to identify and prosecute fraud. In March 2022, AG Garland emphasized DOJ’s use of “big data” to identify payment anomalies that are indicative of fraud. Healthcare companies already have access to vast amounts of data that they can and should use to proactively identify errors, monitor risk areas and address any potential misconduct.
  • Adapt your compliance program and internal controls, as appropriate, to support PRF compliance, reports and audits. Recipients should continue to practice good compliance hygiene and maintain contemporaneous records regarding the receipt and spending of federal funds. Doing so may involve implementing additional systems to track spending, recovery and relief to avoid overlapping use of funds among relief programs, or consulting with grant accounting and compliance advisors to augment existing infrastructure. Recipients also should periodically review policies, procedures and controls, particularly following major updates to program requirements and interpretations.
  • Ensure the accuracy of required PRF reports, certifications and submissions. Particularly in light of ongoing political pressure, HRSA and HHS-OIG likely will conduct extensive oversight of the PRF to identify potential errors, overpayments and improper use of funds. Recipients should carefully review guidance and instructions to avoid inadvertent errors and misstatements on all submissions. Recipients may consider revisiting prior submissions underlying significant disbursements to identify interpretative issues or compliance concerns that warrant additional supporting documentation or disclosure.
  • Carefully consider the implications before entering into arrangements with other parties. The biggest risk to healthcare companies often comes from those with whom they do business. Compliance programs should focus heavily on reducing the risk of entanglement with bad actors.
  • Be diligent in the design and oversight of marketing strategies. Healthcare companies and providers should regularly review their marketing strategies to ensure total transparency and compliance (both historic and prospective) with applicable state and federal anti-kickback statutes. Companies should confirm that patients are reached through appropriate channels. Although issues relating to COVID-19 may be the impetus for a government investigation, violations of the Anti-Kickback Statute frequently result in larger recoveries for the government.
  • Proactively examine coding and billing practices. Providers should immediately review and revisit their coding and billing practices to determine if their practices involved bundling COVID-19 testing with other claims, the use emergency override billing codes or billing for other COVID-19 related services with high reimbursement rates. There is a strong likelihood that the DOJ will review the claims data for any providers with statistically significant use of these billing and coding practices, particularly when the providers are located in geographical areas where the DOJ’s Healthcare Fraud Strike Force and HHS-OIG’s Medicare Fraud Strike Force operate.

Article By Julian L. André, Benton Curtis, and Dawn R. Helak of McDermott Will & Emery

For more health law legal news, click here to visit the National Law Review.

© 2022 McDermott Will & Emery

Return to Work Considerations – COVID and the ADA

Employers are contending with difficult challenges unlike any time in modern history. Even though many employees, especially in the manufacturing industry, returned to work after working from home during the COVID pandemic, the effects of the increased flexibility seen during the COVID era linger. Many employees enjoyed the benefits of working from home during the last two years, even if only part-time, and do not want to give up the benefit. By contrast, and especially as COVID restrictions ease, employers often desire their workforce return to work in a more consistent and routine capacity. These tensions are further complicated by an extremely competitive labor market. Recruiting and retaining employees is a challenge in the current environment. Against this backdrop, prudent employers will keep in mind employment law considerations when developing return-to-work and work-from-home policies.

Where should an employer look to determine what accommodations it should make for an employee who wishes to work from home, either due to a COVID diagnosis and/or a condition that places the employee at a heightened risk for severe COVID? Early in the pandemic, local or state health orders answered such questions regarding COVID-related leave. As the pandemic continued, many of those local health orders were rescinded or expired. As a result, employers are left without clear local guidance. When local requirements are of no assistance, employers should look to CDC guidance for quarantining and isolating guidelines.

In addition, employers should keep in mind that COVID may qualify as a “disability” depending on the symptoms and their severity. If an employee tests positive for COVID and is experiencing symptoms that require an absence from work that is longer than the CDC recommended quarantine period, employers should involve legal counsel to analyze whether the employee’s COVID diagnosis constitutes a disability under the ADA. If it does constitute a disability, the employer is then required to engage in the interactive process under the ADA with the employee to determine whether a reasonable accommodation for the disability can be made. Leave can be an accommodation under the ADA, as can working from home, in certain circumstance and for certain roles.

Likewise, some disabilities may heighten the risk of severe COVID symptoms. In the event that such a disabled employee requests an accommodation related to this heightened risk of COVID, the employer should treat the request as it would any request for accommodation under the ADA. As always, employers should seek legal counsel and check local requirements regarding COVID leave when considering accommodations for employees in these circumstances.

Employers have many competing and challenging considerations when determining a company’s return-to-work policy. While the labor shortage, industry, and specific role considerations certainly play a part in those decisions, employers should not lose sight of the ADA’s additional requirements. The ADA may play a role on an individual level and affect whether an employee may seek leave, work from home, or is entitled to other accommodations related to a COVID diagnosis or high-risk factors.

Article By Felicia S. O’Connor of Foley & Lardner LLP

For more labor and employment legal news, click here to visit the National Law Review.

© 2022 Foley & Lardner LLP

Apple Smartwatch Antitrust Case Survives, Showing ‘Freedom of Design’ is Not Absolute

Judge Cites ‘Associated’ Anticompetitive Conduct Claims

It’s a case that challenges the limits of the “freedom of design” usually enjoyed by companies accused of product design changes alleged to harm competition. Ordinarily, a design change is not the kind of conduct that runs afoul of the antitrust laws, but on March 21, U.S. Judge Jeffrey S. White from the Northern District of California denied Apple Inc.’s motion to dismiss an antitrust case brought against it by AliveCor Inc. The suit alleges that Apple unlawfully maintained its monopoly in the market for heart rate analysis apps by updating WatchOS, the Apple Watch operating system on which AliveCor’s heart rate analysis app runs. (AliveCor, Inc. v. Apple Inc., No. 21-cv-03958-JSW, N.D. Calif.).

Heart rate analysis apps analyze the user’s heart rate in real time using a sensor close to the user’s wrist and determine whether the user’s heart rate is normal or irregular. The app runs constantly while the device is worn and alerts the user when a situation arises requiring an ECG recording and medical analysis. AliveCor also sells an electrocardiogram-capable wrist band for the Apple Watch and related WatchOS software that analyzes reading from the band. AliveCor claims that its products—the ECG-wristband hardware and software and its heart rate analysis app—“helped change the perception of the Apple Watch from an accessory to a personal health monitoring tool.”

AliveCor calls its heart rate monitoring app “SmartRhythm.” According to AliveCor, when sales of SmartRhythm took off Apple was inspired to announce an update to WatchOS with its own heart monitoring app designed to exclude AliveCor from the U.S. market for WatchOS heart rate analysis apps.

SmartRhythm works by using data from the Apple Watch’s heart rate algorithm. According to the complaint, Apple’s update to WatchOS altered the heart rate algorithm in a way that prevents third-party developers from being able to detect heart rate fluctuations and irregularities. As a result of these changes, SmartRhythm could not provide accurate heart rate analysis, and AliveCor removed it from the market.

Consequently, Apple is a monopolist in the WatchOS heart rate analysis app market, which AliveCor claims Apple is maintaining with exclusionary design changes to WatchOS, in violation of Section 2 of the Sherman Act, California’s Unfair Competition Law, and Section 17200 of California Business and Professions Code.

The court denied Apple’s motion to dismiss AliveCor’s monopolization claim in what it characterized as the “[single brand] aftermarket for WatchOS apps.” Applying the factors enumerated by the court in Newcal Indus., Inc. v. Ikon Office Sol., 513 F.3d 1038, 1044 (9th Cir. 2008), the court found that the WatchOS app aftermarket was wholly derivative from the primary smartwatch market, the alleged restraint applied only to the aftermarket, Apple’s aftermarket power was not obtained through contract terms reached in the primary market, and that competition in the smartwatch market does not discipline anticompetitive practices in the WatchOS app aftermarket. Accordingly, the court ruled that AliveCor’s market definition met the Newcal standards for a “single product” relevant market.

Apple argued that a company that improves a product to the benefit of consumers does not violate antitrust laws “absent some associated anticompetitive conduct,” citing the leading “freedom of design” case of Allied Orthopedic Appliances Inc. v. Tyco Health Care Group LP, 592 F.3d 991, 998-99 (9th Cir. 2010). The court quoted the holding of Allied: “If a monopolist’s design change is an improvement, it is necessarily tolerated by the antitrust laws, unless the monopolist abuses or leverages its monopoly power in some other way when introducing the product.”

Apple argued that its update to WatchOS was purely a design change that benefitted users, with no associated anticompetitive conduct. It observed that AliveCor hadn’t established that consumers use Apple’s app instead of some third-party app, or that Apple rejected any third-party apps, or that no other third-party heart apps are available to Apple Watch users. But the court rejected those arguments, noting that Apple failed to provide any legal authority that would require such allegations.

Apple ignored AliveCor’s allegations that Apple abused or leveraged its monopoly power “in some other way” by changing its heart rate algorithm to make it effectively impossible for third parties to inform a user when to take an ECG. AliveCor contended that Apple’s updated heart rate algorithm, which was pushed out to all earlier Apple Watch models, did not improve user experience. Its purpose was to prevent third parties from identifying irregular heart rates and offering competing apps based on that data. “These allegations present the type of ‘associated conduct’ that makes product design changes cognizable under antitrust law. Plaintiff’s allegations plausibly establish that Apple’s conduct was anticompetitive,” Judge White held. A case management conference set for May 20.

Commentary

It is truly difficult to see how some separate, “associated” conduct by Apple other than its design change to WatchOS violates Section 2. It seems more straightforward to consider the design change itself to be a cognizable anticompetitive act. It may be time to drop the fiction maintained in Allied v. Tyco that design changes are “never” antitrust violations unless accompanied by some “other” conduct. Here, Apple has created the market itself in the form of an OS platform used by millions of consumers who depend on it to access all manner of competing complementary products. Under those circumstances, it should be uncontroversial to hold a platform operator liable under the antitrust laws for design changes that exclude competitors or foreclose participants from the market, without indulging in the fiction of “associated” conduct.

Article By Jonathan Rubin of MoginRubin

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© MoginRubin LLP

FDA and FTC Issue Warning Letters to CBD Companies

  • On March 28, 2022, the Food and Drug Administration (FDA) and Federal Trade Commission (FTC) jointly issued seven warning letters to companies marketing cannabidiol (CBD) products with COVID-19 related claims.
  • Specifically, the agencies warned the following companies regarding the promotion of their respective products with claims that they cure, mitigate, treat or prevent COVID-19: Cureganics, Heaven’s Organics LLC, Functional Remedies, LLC D/B/A Synchronicity Hemp Oil, Greenway Herbal Products LLC, CBD Social, UPSY LLC, and Nature’s Highway. Examples of claims include: “Our research suggest that CBD . . . can block SARS-Cov-2 infection at early and even later stages of infection. . .”, “Studies Show CBD Compounds Prevent COVID Cells From Replicating”, and “Can CBD Help with the Fight Against COVID? Some of the worst effects of COVID are caused by inflammation, and CBD is a potent anti-inflammatory.”
  • By way of background, under the Federal Food, Drug, and Cosmetic Act (FD&C Act), products intended to cure, treat, mitigate, or prevent disease are considered drugs and are subject to the requirements that apply to drugs. Therefore, the agencies classified the products as unapproved and misbranded drugs that may not be legally introduced or delivered for introduction into interstate commerce without prior approval from FDA.
  • The letters included a cease-and-desist demand from FTC, prohibiting the companies from making such COVID-19 related claims. The companies were provided with 48 hours to respond with specific steps that were taken to correct the violations.

Article By Food and Drug Law Practice Group at Keller and Heckman LLP

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© 2022 Keller and Heckman LLP

EPA Will Propose to Ban Ongoing Uses of Asbestos

The U.S. Environmental Protection (EPA) announced on April 5, 2022, that it will propose to prohibit ongoing uses of chrysotile asbestos, the only known form of asbestos currently imported into the United States. EPA notes that the proposed rule will be “the first-ever risk management rule issued under the new process for evaluating and addressing the safety of existing chemicals under the Toxic Substances Control Act (TSCA) that was enacted in 2016.” EPA will propose to prohibit manufacture (including import), processing, distribution in commerce, and commercial use of chrysotile asbestos for all ongoing uses of chrysotile asbestos. EPA will also propose targeted disposal and recordkeeping requirements in line with industry standards, Occupational Safety and Health Administration (OSHA) requirements, and the Asbestos National Emission Standards for Hazardous Air Pollutants (NESHAP). EPA has posted a pre-publication version of the proposed rule. Publication of the proposed rule in the Federal Register will begin a 60-day comment period.

Background

As reported in our January 4, 2021, memorandum, EPA released on December 30, 2020, the final risk evaluation for asbestos, part 1: chrysotile asbestos (Asbestos RE Part 1). Of the six use categories evaluated (chlor-alkali diaphragms, sheet gaskets, other gaskets, oilfield brake blocks, aftermarket automotive brakes/linings, and other vehicle friction products), EPA found that there is unreasonable risk to workers, occupational non-users (ONU), consumers, and/or bystanders within each of the six chrysotile asbestos use categories. EPA found no unreasonable risk to the environment. According to the final risk evaluation, chrysotile is the prevailing form of asbestos currently mined worldwide, and “so it is assumed that a majority of commercially available products fabricated overseas that contain asbestos are made with chrysotile. Any asbestos being imported into the U.S. in articles is believed to be chrysotile.” The other five forms of asbestos are now subject to a significant new use rule (SNUR), as reported in our April 18, 2019, memorandum, “EPA Announces Final SNUR for Asbestos Will ‘Close Loophole and Protect Consumers.’”

Proposed Rule

EPA will propose a rule under TSCA Section 6(a) to prohibit manufacture (including import), processing, distribution in commerce, and commercial use of chrysotile asbestos in bulk or as part of chrysotile asbestos diaphragms used in the chlor-alkali industry and chrysotile asbestos-containing sheet gaskets used in chemical production. EPA will propose that these prohibitions take effect two years after the effective date of the final rule.

EPA will also propose pursuant to TSCA Section 6(a) to prohibit manufacture (including import), processing, distribution in commerce, and commercial use of chrysotile asbestos-containing brake blocks used in the oil industry, aftermarket automotive chrysotile asbestos-containing brakes/linings, other chrysotile asbestos-containing vehicle friction products (not including the National Aeronautics and Space Administration (NASA) Super Guppy Turbine aircraft use), and other chrysotile asbestos-containing gaskets. EPA will propose that these prohibitions take effect 180 days after the effective date of the final rule.

EPA will further propose pursuant to TSCA Section 6(a) to prohibit manufacture (including import), processing, and distribution in commerce of: aftermarket automotive chrysotile asbestos-containing brakes/linings for consumer use, and commercial use of other chrysotile asbestos-containing gaskets for consumer use. EPA will propose that these prohibitions take effect 180 days after the effective date of the final rule.

EPA will also propose disposal and recordkeeping requirements under which regulated parties would document compliance with certain proposed prohibitions. EPA states that it does not intend the proposed prohibitions on processing or distribution in commerce to prohibit any processing or distribution in commerce incidental to disposal of the chrysotile asbestos waste in accordance with the proposed requirements.

According to EPA, because a determination has been made that chrysotile asbestos presents an unreasonable risk to health within the United States or to the environment of the United States, pursuant to TSCA Section 12(a)(2), the proposed rule would apply to chrysotile asbestos even if being manufactured, processed, or distributed in commerce solely for export from the United States.

Commentary

Bergeson & Campbell, P.C. (B&C®) commends EPA on this historical achievement. Unsurprisingly, there are aspects of this precedent-setting proposed rule that invite discussion and warrant comment from affected parties. Key among these issues is a potential significant legal vulnerability in the underlying risk evaluation (i.e., Asbestos RE Part 1) for the proposed rule, an issue that may overshadow this historic achievement in a manner reminiscent of EPA’s failed ban of asbestos in 1991 (Corrosion Proof Fittings v. EPA, 947 F.2d 1201 (5th Cir., 1991)).

EPA proposed that the prohibition on specific conditions of use (e.g., chrysotile asbestos diaphragms used in the chlor-alkali industry) would take effect two years after the effective date of the final rule. EPA stated that it “believes an aggressive transition away from chrysotile asbestos will spur adoption of superior technology [e.g., membrane cells with increased concentrations of per- and polyfluoroalkyl substances (PFAS)].” The clear need to consider EPA’s intended action on asbestos in the context of its ongoing actions on PFAS is of course not lost on the Agency. EPA acknowledged that “the transition away from asbestos-containing diaphragms could result in greater usage and release of PFAS.”

B&C notes that innovative new technologies, such as alternative membrane cells, may be available in the future, but those technologies must be proven to be economically and technically viable. Once proven effective, the underlying chemical substances must be reviewed as new chemicals if so classified under TSCA. The development, review, and approval are all on indeterminate timelines, so it is speculative when novel, non-PFAS-based technologies will be commercially available and, of course, whether that time will be prior to the effective date of EPA’s proposed ban on asbestos.

EPA requested comment on specific aspects of the proposed rule that B&C encourages potentially impacted parties to consider. For example, EPA discussed its authority under TSCA Section 6(g) to grant a time-limited exemption for a specific condition of use, such as the chlor-alkali industry, where EPA finds “that compliance with the proposed requirement would significantly disrupt the national economy, national security, or critical infrastructure.”

EPA also requested comment on a primary alternative regulatory option that EPA discussed for the chlor-alkali diaphragm and sheet gasket categories that would allow a prohibition to take effect five years after the effective date of the final rule. As part of this option, EPA would include establishment of a risk-based performance standard known as an existing chemical exposure limit (ECEL). EPA developed an eight-hour time-weighted average (8-hr TWA) ECEL of 0.005 fibers/cubic centimeter (f/cc) for inhalation exposures to chrysotile asbestos as an eight-hr TWA ECEL-action level of 0.0025 f/cc, with associated requirements for initial and periodic monitoring and respirator usage/type if exceedances are found.

As part of the monitoring requirements, EPA stated that it would “require use of appropriate sampling and analytical methods to determine asbestos exposure, including: … Compliance with the Good Laboratory Practice Standards at 40 CFR Part 792,” despite the fact that EPA acknowledges that other standards, such as Industrial Hygiene Laboratory Accreditation Program (IHLAP), are more appropriate for industrial hygiene monitoring. EPA’s TSCA Section 5(e) order template states the following under Section III.D:

Compliance with TSCA GLPS, however, is not required under this New Chemical Exposure Limit Section where the analytical method is verified by a laboratory accredited by either: the American Industrial Hygiene Association (“AIHA”) Industrial Hygiene Laboratory Accreditation Program (“IHLAP”) or another comparable program approved in advance in writing by EPA.

EPA devoted one paragraph in the proposed rule to “TSCA section 26(h) considerations.” EPA stated, in part, that its unreasonable risk determination “was based on a risk evaluation, which was subject to peer review and public comment, was developed in a manner consistent with the best available science and based on the weight of the scientific evidence as required by TSCA sections 26(h) [and 26(i)] and 40 CFR 702.43 and 702.45.”

B&C notes that EPA stated in the Asbestos RE Part 1 the following:

TSCA § 26(h) and (i) require EPA, when conducting Risk Evaluations, to use scientific information, technical procedures, measures, methods, protocols, methodologies and models consistent with the best available science and base its decisions on the weight of the scientific evidence. To meet these TSCA § 26 science standards, EPA used the TSCA systematic review process described in the [2018] Application of Systematic Review in TSCA Risk Evaluations document [citation omitted] [2018 SR Document].

Prior to completing Asbestos RE Part 1, EPA requested the National Academies of Science, Engineering, and Medicine (NASEM) to review the 2018 SR Document. In February 2021, NASEM released its consensus study report on EPA’s 2018 SR Document and concluded that it did not meet the criteria of “comprehensive, workable, objective, and transparent” and that “The OPPT approach to systematic review does not adequately meet the state-of-practice.”

NASEM recommended that “With regard to hazard assessment for human and ecological receptors, OPPT should step back from the approach that it has taken and consider components of the OHAT, IRIS, and Navigation Guide methods that could be incorporated directly and specifically into hazard assessment.”

In response to the NASEM review, EPA revised its systematic review method. On December 20, 2021, EPA released the “Draft Systematic Review Protocol Supporting TSCA Risk Evaluations for Chemical Substances” (2021 Draft Protocol) for public comment. EPA acknowledged in the 2021 Draft Protocol that:

Previously [in the 2018 SR Document], EPA did not have a complete clear and documented TSCA systematic review (SR) Protocol. EPA is addressing this lack of a priori protocol by releasing [the 2021 Draft Protocol].

EPA further stated that the:

[2021 Draft Protocol] is significantly different [from the 2018 SR Document] in that it includes descrition [sic] of the Evidence Integration process…, which was not previously included in the [2018 SR Document].

B&C recognizes that the scientific methods used to inform systematic review are not static and that updates will be required as the science evolves. In this instance, however, many of the documents cited as supporting information for updating the 2021 Draft Protocol (e.g., Office of Health Assessment and Translation (OHAT), 2015) were available prior to EPA issuing the 2018 SR Document. Rather than utilizing these documents at the time, EPA developed the 2018 SR Document de novo. In other words, EPA chose to develop its own methodology in 2018 rather than incorporating and adapting existing methodologies that represented the best available science at the time.

These issues raise interesting procedural questions and issues around whether EPA demonstrated that Asbestos RE Part 1 was based on the best available science and weight of scientific evidence, as required under TSCA Sections 26(h) and 26(i) and the implementing regulation under 40 C.F.R. Part 702.

B&C encourages stakeholders to review EPA’s proposed risk management rule on chrysotile asbestos, even for entities that do not manufacture, process, distribute, or use this substance. We urge this review because of the precedential nature of EPA’s decisions. B&C also encourages interested parties to provide public comments on the proposed rule, given that risk management decisions in the proposed rule will likely serve as a basis from which EPA regulates other chemical substances EPA is evaluating under TSCA Section 6.

Article By: the Government Regulation practice at Bergeson & Campbell, P.C.

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©2022 Bergeson & Campbell, P.C.

HIPAA Enforcement Continues Under Right of Access Initiative

On March 28, 2022, the Department of Health and Human Services (HHS) Office for Civil Rights (OCR) announced the resolution of two additional cases as part of OCR’s HIPAA Right of Access Initiative.

The Right of Access Initiative was launched by OCR in 2019 “to support individuals’ right to timely access their health records at a reasonable cost under the HIPAA Privacy Rule” as explained by OCR. In the March 28 announcement, OCR indicated its continuing commitment to enforce compliance with the HIPAA Rules, including the “foundational” Right of Access provision. With the two most recent cases, there have now been 27 investigations and settlements under the Right of Access Initiative (see full chart below).

Nearly all of the investigations in the Right of Access Initiative involve a single individual unable to obtain a copy of some or all of their protected health information from a health care provider or to do so within the timeframe required or in accordance with fees permitted by the HIPAA Privacy Rule. In some cases, additional issues found during the investigation, such as failure to have conducted a HIPAA risk assessment or lack of HIPAA policies, are part of the settlement.  In all cases, in addition to the monetary penalty, the settlement has included a Corrective Action Plan imposing various obligations, such as policy development, training, and mandatory reporting to OCR.

The Right of Access Initiative remains one of the most active areas of HIPAA enforcement. In its most recent Annual Report to Congress on HIPAA Privacy, Security, and Breach Notification Rule Compliance, OCR noted that right of access was the third most common issue of complaints resolved. Moreover, the Right of Access Initiative coordinates with the ONC 2020-2025 Federal HIT Strategic Plan and the goal of “Providing patients and caregivers with more robust health information.” It is a core tenant of the Federal HIT Strategic Plan that access to health information will “better support person-centered care and patient empowerment.”

Article By Allen R. Killworth and Zeina Abu-Hijleh of Epstein Becker & Green, P.C.

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©2022 Epstein Becker & Green, P.C. All rights reserved.

HHS OIG Signs Off on Substance Use Recovery Incentive Program

On March 2, 2022, the Department of Health and Human Services (“HHS”) Office of the Inspector General (the “OIG”) issued a new advisory opinion (“AO 22-04”) related to a program through which the Requestor would provide certain individuals access to digital contingency management (“CM”) and related tools to treat substance use disorders (“Program”).  The OIG advised that it would not impose administrative sanctions under the Anti-Kickback Statute (“AKS”) or the Beneficiary Inducements Civil Monetary Penalty Law (“CMPL”).

The Requestor, a digital health company, offers a Program that uses smartphone and smart debit card technology to implement CM for individuals with substance use disorders, addressing aspects of these disorders “in ways that conventional counseling and medications often cannot.” The Requestor makes this technology available to individuals who meet certain requirements through contracts with a variety of entities, such as health plans, addiction treatment providers, employee assistance programs, research institutions, and other treatment providers (“Customers”).

Individuals (‘Members”) are Customer- or self-referred, and are subject to a structured interview using the American Society of Addiction Medicine Continuum Triage tool before participation in the Program. The Requestor’s enrollment specialist, under the guidance of a licensed clinical supervisor, determines the type of services and frequency of recovery coaching using an evidence-based, automated algorithm. The Program technology establishes the schedule of expected target behavioral health events, objectively validates whether each expected event has occurred, and, if it has, promptly disburses the exact, protocol-specified incentive to the Member, using (where appropriate) a progressive reinforcement schedule.

The Program is not limited to treatments or federally reimbursable services; it also includes, among other features, support groups, medication reminders, and appointment attendance verification. For those that do include federally reimbursable services, the Requestor advised that such services may be furnished by a Customer. Incentives from the Program are provided to Members via a “smart debit card.” The card includes “abuse and anti-relapse protections (e.g., it cannot be used at bars, liquor stores, casinos, or certain other locations nor can it be used to convert credit to cash at ATMs or gas stations)”, and allows the Requestor to monitor use. Incentives are capped at $200/month and $599/year; individual incentives are typically relatively small, at $1-$3.

The Requestor receives fees from Customers on either a flat monthly basis, per eligible, active Member, or a pay-for-performance model, in which Requestor is paid upon a Member achieving certain agreed-upon targets for abstinence. The Requestor certified that the aggregate fees are consistent with fair market value and do not vary based on the volume or value of business generated under federal health care programs. Instead, fees are based on the service configurations being purchased and the intensity of behavioral targets that are planned for each Member, as well as whether a member is low- or high-risk, and in or out of treatment.

OIG concluded that two stream of remuneration potentially implicate the AKS and CMPL.  First, Customers pay Requestor a fee to provide services, some of which could incentivize a Member to receive a federally billable service. Second, some of the fees Customers pay to Requestor get passed on to Members as CM Incentives for achieving certain behavioral health goals, some of which may involve services that could be billable to Federal health care programs (e.g., a counseling session) by a particular provider or supplier, which could be a Customer. OIG noted its longstanding concerns relating to the offer of incentives intended to induce beneficiaries to obtain federally reimbursable items and services, as such incentives could present significant risks of fraud and abuse.

The OIG concluded that the Program presents a minimal risk of fraud and abuse and declined to impose sanctions, providing four justifications –

  1. The Requestor certified that the Program is based in research, and provided evidence that CM is a “highly effective, cost-efficient treatment for individuals with substance use disorders.” Therefore, the OIG decided that, taken together with the other safeguards present in the Arrangement, the incentives in the Requestor’s Program serve as “part of a protocol-driven, evidence-based treatment program rather than an inducement to seek, or a reward for having sought, a particular federally reimbursable treatment.”
  2. The incentives offered through the Program have a relatively low value and a cap, and largely are unrelated to any federally payable services, especially as the Requestor is not enrolled in and does not bill to federal health care programs for Program services. Therefore, the OIG determined that the risk of the incentives “encouraging overutilization of federally reimbursable services is low.”
  3. The Requestor’s Customer base is not limited to entities that have an incentive to induce receipt of federally reimbursable services. While the OIG acknowledged that there may be instances where an incentive may be given for receiving a federally billable service, the fees do not vary based on volume or value of any federally reimbursable services, and the Customers do not have control of the Program. Therefore, the OIG determined that the risk is low an entity would become a Customer to “generate business or reward referrals.”
  4. Although the incentives loaded onto a smart debit card function as cash equivalents, the OIG found the safeguards included in the Arrangement sufficient to mitigate fraud and abuse concerns. The Requestor, which does not bill federal health care programs or have an incentive to induce overutilization, determines what services an individual needs and what incentives are attached. Additionally, the smart debit card has “anti-relapse protections”, which can signal possible need for intervention. Therefore, the OIG concluded that the remuneration in the form the smart debit card is sufficiently low risk.

AO 22-04 reflects HHS’s continued aims to increase flexibility around substance use disorder treatments.  Just two weeks before, HHS announced two grant programs, totaling $25.6 million, to expand access to medication-assisted treatment for opioid use disorder and prevent the misuse of prescription drugs. In a press release, HHS Secretary Xavier Becerra is quoted as saying, “At HHS we are committed to addressing the overdose crisis, and one of the ways we’re doing this is by expanding access to medication-assisted treatment and other effective, evidenced-based prevention and intervention strategies.” HHS’ “National Tour to Strengthen Mental Health” is intended to “hear directly from Americans across the country about the challenges they’re facing, and engage with local leaders to strength the mental health and crisis care in our communities”, focused on three aspects: mental health, suicide, and substance use. Further flexibilities should be anticipated in these areas as the Tour continues.

Anyone seeking treatment options for substance misuse should call SAMHSA’s National Helpline at 800-662-HELP (4357) or visit findtreatment.gov. If you or anyone you know is struggling with thoughts of suicide, please call the National Suicide Prevention Lifeline at 800-273-TALK (8255), or text the Crisis Text Line (text HELLO to 741741).

Article By Christine M. Clements and Theresa E. Thompson of Sheppard, Mullin, Richter & Hampton LLP

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Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.