U.S. Supreme Court Overturns Roe and Casey: What This Decision Means for Employers

As many expected based on the draft opinion that was leaked months ago, the U.S. Supreme Court has held the U.S. Constitution does not protect the right to obtain an abortion. Dobbs v. Jackson Women’s Health Organization, No. 19-1392 (June 24, 2022).

Dobbs overturns nearly 50 years of precedent from the Court’s decision in Roe v. Wade and Planned Parenthood Pennsylvania v. Casey on the issue.

The impact of Dobbs will vary, as states are now at liberty to enforce and create abortion legislation without restrictions arising out of constitutional protections.

What does this mean for employers?

As pressure mounts on this issue, some employers may be considering what, if anything, they can or should do. Many states have enacted legislation that restricts individual abortion rights and potentially third parties who assist individuals who seek abortions. To the extent any state laws were not enforced because of the Court’s holding in Roe or Casey, states can move forward now to implement and enforce those laws.

Laws often referred to as “trigger laws,” those that are in place but unenforceable due to overriding federal restrictions, become enforceable once those federal restrictions are lifted. As a result of Dobbs, abortion-related “trigger laws” previously unenforceable can take effect, creating new standards for individuals and others that will redefine the national abortion law landscape.

Some existing state laws and trigger laws may affect employers and put employers at risk of violating state law if they implement policies to assist employees seeking an abortion or even continue to cover abortions under group health plans. For example, a state law may create liability for anyone who “aids or abets” a person who obtains an abortion. Employers also must be cognizant of how they apply their leave policies, who may seek accommodations based on a sincerely held religious belief, and whether certain provisions of the Pregnancy Discrimination Act apply to women who are seeking or who have had an abortion.

In addition, the Court’s ruling may affect employee benefit plans. Many employers are considering additional benefits for their employees, and their covered dependents, such as travel reimbursement for seeking an abortion outside of the local jurisdiction due to state law restrictions. There are many legal issues to consider in connection with the coverage of abortion-related services under employee benefit plans. (For additional guidance on the issue, see our article, Group Health Plan Considerations in the Face of (Potentially) Changing Abortion Laws.) Depending on how the state laws are enacted, there also may be issues with relying on ERISA preemption provisions to avoid these obligations.

Corporate management and directors should plan for changes and be aware of policies and fiduciary responsibilities. This can include preparing for public and employee reactions (for and against), legislative and law enforcement threats, social media posts, and other employee demonstrations. Pressure from a variety of groups to take a corporate public opinion also may occur.

Whether changes to leave policies, employee benefits, travel reimbursement, or handling accommodation requests, employers considering policies or benefit offerings in response to Dobbs must carefully review and consider federal and state laws, including state abortion-related legislation to evaluate the risk of potential liability.

Jackson Lewis P.C. © 2022

CMS Reduces COVID-19 Vaccine Mandate Surveys and Rescinds Surveyor Vaccination Requirements

In two recent memoranda, the Centers for Medicare and Medicaid Services (CMS) made changes to previously issued survey guidance related to COVID-19 vaccination issues.

In QSO-22-17-ALL, CMS modified the frequency by which State Agencies and Accreditation Organizations will survey for compliance with the federal staff vaccine mandate applicable to health care providers and suppliers (discussed in a prior post).  Noting that 95% of providers and suppliers surveyed have been found in substantial compliance with the rule, CMS is eliminating the previous requirement that State Agencies and Accreditation Organizations survey for compliance with the vaccine mandate during every survey.  Review of compliance with vaccine mandate is still required, however, during initial surveys, recertification surveys, and in response to specific complaint allegations that allege non-compliance with the staff vaccination requirement.  This means that a State Agency or Accreditation Organization is not required to review compliance with the staff vaccination requirement during, for example, a validation survey or a complaint survey unrelated to compliance with the staff vaccination requirement.  A State Agency or Accreditation Organization may still choose to expand any survey to include review of vaccine mandate compliance; however, the new guidance should result in a reduction in survey frequency of this issue for providers and suppliers.

In QSO-22-18-ALL, CMS rescinded, in its entirety, the previously issued QSO-22-10-ALL memorandum, which had mandated that surveyors of State Agencies and Accreditation Organizations be vaccinated for COVID-19.  However, CMS noted that the State Agencies and Accreditation Organizations were responsible for compliance and prohibited providers and suppliers from asking surveyors for proof of vaccination.  While CMS is now encouraging vaccination of surveyors performing federal oversight surveys, the mandate for vaccination is no longer in effect.

Article By Allen R. Killworth of Epstein Becker & Green, P.C.

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

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

Health Care Providers on Alert: Two Hospitals Penalized for Continuous Noncompliance with the Hospital Price Transparency Rule

We previously discussed the requirements of the Hospital Price Transparency Rule (“Rule”) on health care providers and health plans, as well as CMS’s proposal to increase penalties for a hospital’s failure to comply with the Rule.  About a year and a half after the Rule became effective, CMS has now imposed its first set of civil monetary penalties (“CMPs”) on Northside Hospital Atlanta and Northside Hospital Cherokee, which have been fined $883,180 and $214,320, respectively.

The Rule requires, in part, hospitals to make public a machine-readable file containing a list of all standard charges for all items and services, such as, e.g., supplies, room and board, and use of the facility, among other items.  See 45 C.F.R. § 180.40(a); id. at § 180.20.  The Rule also requires hospitals to display shoppable services in a consumer-friendly manner.  See id. at § 180.60(d)(2); id. at § 180.60(b).  The goal of these specific requirements, in addition to those set forth in the remainder of the Rule, is to provide consumers with sufficient information about the charges for certain items and services by requiring health care providers and health plans to be publicly transparent about such charges.

Based on CMS’s CMP letters, dated June 7, 2022, Northside Hospital Atlanta and Northside Hospital Cherokee were non-compliant with the aforementioned specific requirements of the Rule.  The chronology of events is important to understand how CMS ended up issuing its CMP letters.

Northside Hospital Atlanta

For Northside Hospital Atlanta:

  • CMS documented the hospital’s non-compliance since March 24, 2021.
  • CMS issued a Warning Letter, dated April 19, 2021, to the hospital and provided it the opportunity to respond and to provide supporting documentation to CMS.
  • Northside Hospital Atlanta did not respond.
  • On September 2, 2021, CMS reviewed the hospital’s website and determined that the non-compliance persisted.
  • On September 30, 2021, CMS issued a Request for Corrective Action Plan (CAP) to the hospital, stating that it was non-compliant with the aforementioned specific requirements of the Rule.
  • On November 15, 2021, in response to the Request for CAP, the hospital stated that patients could request specific price estimate quotes by calling or emailing Northside Hospital Atlanta, which CMS determined was insufficient in response to its Request for CAP and to comply with the Rule.
  • On December 20, 2021, CMS requested a revised CAP from the hospital.
  • Northside Hospital Atlanta did not respond.
  • On January 11, 2022, CMS conducted a technical assistance call with the hospital, during which the hospital confirmed that it was non-compliant with the Rule and explained that it had intentionally removed all previously posted pricing files.
  • On January 24, 2022, CMS, again, requested a revised CAP from the hospital.
  • Northside Hospital Atlanta did not respond.

Based on the foregoing, CMS imposed an $883,180 CMP on Northside Hospital Atlanta, calculated as follows, pursuant to 45 C.F.R. § 180.90:

  • $36,300
    • $300 per day of non-compliance times 121 days.
    • 121 days represents the number of calendar days during 2021 that Northside Hospital Atlanta was non-compliant with the Rule (September 2, 2021 through December 31, 2021), pursuant to 45 C.F.R. § 180.90(2)(i).

 plus

  • $846,880
    • $10 per bed per day times 536 beds times 158 days.
    • 158 days represents the number of calendar days during 2022 that Northside Hospital Atlanta was non-compliant with the Rule (January 1, 2022 through the date of CMS’s CMP letter, June 7, 2022), pursuant to 45 C.F.R. § 180.90(2)(ii).

Northside Hospital Atlanta has until 60 calendar days from the date of CMS’s CMP letter to pay.  Until the hospital notifies CMS that all non-compliance has been corrected, CMPs will continue to accrue.

Northside Hospital Cherokee

For similar reasons as Northside Hospital Atlanta, Northside Hospital Cherokee was fined $214,320.  CMS noted that Northside Hospital Cherokee was non-compliant since April 16, 2021, and notified the hospital by Warning Letter, dated May 18, 2021.  CMS reviewed the hospital’s website on September 9, 2021, and issued a Request for CAP on October 27, 2021—to which the hospital did not respond.  Similar to Northside Hospital Atlanta, CMS held a technical assistance call on January 11, 2022, during which Northside Hospital Cherokee notified CMS that it had intentionally removed all previously posted pricing files.  CMS requested a Request for CAP on January 24, 2022—to which the hospital did not respond.

Similar to Northside Hospital Atlanta, Northside Hospital Cherokee was penalized $214,320, calculated as follows:

  • $34,200
    • $300 per day of non-compliance times 114 days.
    • 114 days represents the number of calendar days during 2021 that Northside Hospital Cherokee was non-compliant with the Rule (September 9, 2021 through December 31, 2021), pursuant to 45 C.F.R. § 180.90(2)(i).

plus

  • $180,120
    • $10 per bed per day times 114 beds times 158 days.
    • 158 days represents the number of calendar days during 2022 that Northside Hospital Cherokee was non-compliant with the Rule (January 1, 2022 through the date of CMS’s CMP letter, June 7, 2022), pursuant to 45 C.F.R. § 180.90(2)(ii).

Similar to Northside Hospital Atlanta, CMS noted that Northside Hospital Cherokee continues to be non-compliant and, thus, CMPs will continue to accrue.

Takeaways

These fines reflect CMS’s willingness to take material enforcement action where the Rule’s regulatory requirements are largely ignored and CMS’s subsequent efforts to obtain compliance are rejected.  Non-compliance carries heavy fines that are calculated, in part, by the number of days of non-compliance and by bed count.  Health care providers should take notice and ensure that they are compliant or, at least, making efforts towards compliance with the Rule’s requirements.  Critically, CMS will not accept a refusal to comply, as reflected in CMS’s responses to Northside Hospital Atlanta’s and Northside Hospital Cherokee’s refusals to submit CAPs.  As noted in CMS’s CMP letters to these providers, CMS is scanning websites and subsequently notifying providers that appear to be non-compliant with the Rule—which are ignored at the provider’s peril.

© 2022 Proskauer Rose LLP.

Privacy Tip #335 – Health Care Sector Continues to Be Hit with Ransomware

According to the 2022 State of Ransomware Report issued recently by Sophos, it surveyed 5,600 IT professionals from 31 countries, including professionals in the health care sector. Those professionals in the health care sector shared that 66 percent of them had experienced a ransomware attack in 2021, which was an increase of 69 percent over 2020. This was the largest increase of all sectors surveyed.

If you look at the Office for Civil Rights data breach portal, you will see that a vast majority of breaches reported by health care providers and business associates are related to “Hacking/IT incident.” This confirms that the health care sector continues to be attacked by threat actors seeking to steal protected health information of patients.

If you are a patient who receives a breach notification letter from a health care provider or business associate, the letter will provide guidance on how to protect yourself following a data breach and may offer some protection guidance, including credit monitoring or fraud resolution. Such a letter has been sent to patients to comply with the breach notification requirements of HIPAA and state law. Part of those requirements includes that the patients be provided mitigation steps following the breach to protect themselves from fraud. Avail yourself of these protections in the event your information is compromised. Take the time to sign up for the mitigation offered. It is clear that these attacks will not subside any time soon.

Copyright © 2022 Robinson & Cole LLP. All rights reserved.

ERIC Files Amicus Brief Rebutting DOL Attempt to Create New Regulations in Lawsuit, Petitions US Supreme Court on Seattle Healthcare Case

Read on below for coverage of recent law firm news from McDermott Will & Emery.

ERIC Files Amicus Brief Rebutting DOL Attempt to Create New Regulations in Lawsuit

McDermott Will & Emery’s Andrew C. LiazosMichael B. Kimberly and Charlie Seidell recently filed an amicus brief in the US Court of Appeals for the 10th Circuit on behalf of the ERISA Industry Committee (ERIC). McDermott filed the brief in response to a US Department of Labor (DOL) amicus brief that advanced a novel interpretation of its regulations which, if adopted through litigation, would change longstanding procedures for benefit determinations under self-funded medical plans sponsored by large employers. The amicus brief focuses on key arguments against the DOL’s attempted regulatory reinterpretation, including that:

  • DOL may not rewrite its regulations outside of notice-and-comment rulemaking;
  • DOL’s interpretation of its own regulations is inconsistent with the plain text of the regulations;
  • There are good policy reasons underlying differential treatment of healthcare and disability benefits determinations; and
  • DOL’s interpretation of the regulations in its amicus brief is not entitled to deference under the Supreme Court decision in Kisor.

Read ERIC’s amicus brief here.

Read ERIC’s statement here.

ERIC Petitions US Supreme Court on Seattle Healthcare Case

McDermott Will & Emery’s Michael B. KimberlySarah P. Hogarth and Andrew C. Liazos, are co-counsel on a petition for certiorari before the Supreme Court of the United States on behalf of the ERISA Industry Committee (ERIC). The petition calls for review of ERIC’s legal challenge to the City of Seattle’s hotel healthcare “play or pay” ordinance. The ordinance mandates hospitality employers make specified monthly healthcare expenditures for their covered local employees if their healthcare plans do not meet certain requirements. The petition demonstrates that Seattle’s ordinance is a clear attempt to control the benefits provided under medical plans in violation of the preemption provision under the Employee Retirement Income Security Act of 1974, as amended (ERISA). This case is of significant national importance. Several other cities have proposed making similar changes, and complying with these types of ordinances will substantially constrain the ability of employers to control the terms of their medical plans on a uniform basis. ERIC’s petition is joined by several trade associations, including the US Chamber of Commerce, the American Benefits Council and the Retail Industry Leaders Association.

Read ERIC’s petition for writ of certiorari here.

Read ERIC’s statement here.

 

Article by , and .

Attorney Advertising © 2022 McDermott Will & Emery

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

 

Employers Beware: Take-Home COVID Cases are on the Rise (US)

You’ve just been informed that an employee who apparently contracted COVID-19 from exposure in your workplace brought the virus home, and now his spouse, who is in a high-risk category, has contracted the virus and is in the hospital.  Do you as the employer face potential liability for the spouse’s illness?

More than two dozen so-called “take-home” COVID-19 lawsuits have been filed across the country, including against some of the largest employers in the US. This alarming pattern has prompted trade groups to warn employers of the potential for lawsuits stemming from COVID infections filed not only by workers’ family and friends but by anyone infected by that circle of people, creating a seemingly endless chain of liability for employers. Some states have enacted laws shielding employers from such suits, but where that is not the case, the legal theories and procedural paths under which these suits have proceeded vary – including some being brought in state courts, some in federal courts, and others brought under claims within the worker’s compensation system.

The issue is currently being tested in California, where the US Court of Appeals for the Ninth Circuit recently certified questions to the California Supreme Court seeking guidance on the state’s laws. The case, Kuciemba v. Victory Woodworks, Inc., arose after Mr. Kuciemba allegedly was exposed to COVID-19 through his work at one of his employer’s job sites.  According to the Kuciembas, Victory knowingly transferred workers from an infected construction site to the job site where Mr. Kuciemba was assigned without following the safety procedures required by the San Francisco Health Order. He was forced to work in close contact with these employees, and soon developed COVID-19, which he brought back home. His wife is over 65 years old and was at high risk from COVID-19, and the family had been careful to limit their exposure to the virus, with the exception of Mr. Kuciemba going to work. Mrs. Kuciemba subsequently tested positive for the disease and was hospitalized for over a month after developing severe symptoms. The Kuciembas filed suit, alleging that Victory caused Mrs. Kuciemba’s injuries by violating the Health Orders, and negligently allowed COVID-19 to spread from its worksite into their household.

The lower court dismissed the case, which was then appealed to the federal appeals court. After hearing the argument, the court asked the California Supreme Court to answer two questions of state law. First, whether Mrs. Kuciemba’s illness was an “injury” that was “derivative” of Mr. Kuciemba’s work-related injury, and therefore, Mrs. Kuciemba’s claims would be subject to the exclusive jurisdiction of the Worker’s Compensation Act (“WCA”); and second, assuming that the WCA is not the exclusive remedy, whether the employer owed a duty to the households of its employees to exercise ordinary care to prevent the spread of COVID-19. Neither question has been squarely answered by the California Supreme Court, although, as noted by the federal appeals court, in a somewhat analogous situation, California courts have allowed suits against employers who negligently allowed their employees to carry asbestos fibers home to their families.

While the Kuciemba case was pending, a California Court of Appeal in another case, See’s Candies v. Superior Court, ruled that the derivative injury doctrine does not bar third-party COVID-related claims. Under a similar fact pattern, the court allowed the negligence case to go forward while noting that the plaintiff would still need to prove that the employer owed a duty of care to non-employees infected with COVID-19 due to an employee contracting the virus at work. Acknowledging that an analysis of this duty “appear[s] worthy of exploration,” the state appellate court said the analysis would include an assessment of “public policy concerns that might support excluding certain kinds of plaintiffs or injuries from relief.” The California Supreme Court declined to review the See’s case, meaning that it’s holding still stands.

The California Supreme Court has not yet announced whether it will use its discretion to respond to the Ninth Circuit’s certified questions in the Kuciembas’ case. In the meantime, California employers cannot automatically rely on the exclusive remedial scheme provided under the worker’s compensation system to cover these claims and are not necessarily shielded from COVID-19 lawsuits brought by employees’ family members (and perhaps others). That said, even if employers owe their employees’ families a duty of care, affected employees will still have to prove that it was the employer’s negligence that caused the illness and that the virus was not contracted from another source – a tall order for a highly transmissible virus like COVID-19. In the meantime, however, it behooves all California employers to continue maintaining health and safety measures to prevent the spread of COVID-19, and react quickly and appropriately in the event of an outbreak of COVID-19 in the workplace.

© Copyright 2022 Squire Patton Boggs (US) LLP

Monkeypox—Do Employers Need to Worry?

Several cases of monkeypox have now been found in the United States. We do not yet know whether employers will need to worry about monkeypox in the context of their workforces and workplace, but it may be wise to be informed.

Monkeypox is a viral illness that has symptoms including body aches, headaches, fatigue, and, notably, a bumpy skin rash. It is primarily found in Africa, most particularly in the Democratic Republic of the Congo. Monkeypox has an incubation period that generally lasts 7-14 days but can be as long as 5-21 days. It has now recently been found in the United States, according to the U.S. Centers for Disease Control and Prevention (CDC). The first case reported was in Massachusetts in a man who had been to Canada. The second was in New York City by another individual who had a virus similar to monkeypox. And the third was a “presumptive case” involving a Broward County, Florida, man who had traveled internationally, the CDC said.

Unlike what we have been through with COVID-19, wearing a mask will likely not be an issue with monkeypox. It is spread through infected animals, prolonged person-to-person contact, direct contact with lesion materials, or indirect contact through contaminated items, such as contaminated clothing. Avoiding these will help avoid the possibility of infection. Since frequent handwashing continues to be a good hygiene practice, continuing to make this an easy and frequent practice for employees is generally a good health practice, according to health officials.

Monkeypox has also recently been found in Australia, Belgium, Canada, France, Germany, Italy, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom. According to public health officials, the risk of exposure remains low although there are expected to be more cases in the United States. Health officials believe the smallpox vaccination will offer some amount of protection from monkeypox.

Employers that have employees who are soon to travel internationally, either for personal or business reasons, may want to consider educating them on the symptoms, how the virus is transmitted, and the fact that they may wish to consult with their own healthcare practitioners about the smallpox vaccination. There is no indication that travel should be avoided or prohibited.

© 2022, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

Medicare Advantage: OIG Report Finds Improper Denials

On April 27,2022, the Office of Inspector General of the Department of Health and Human Services (OIG), Office of Evaluations and Inspections, issued a report on the performance of Medicare Advantage Organizations (MAOs) in approving care and payment consistently with Medicare coverage rules. In its review, OIG found that 13% of MAO denials of prior authorization requests should have been approved and that 18% of payment requests from providers were improperly denied. OIG also made a number of recommendations to the Center of Medicare and Medicaid Services (CMS) with respect to its oversight of MAOs.

Purpose and Method of the Study

OIG undertook the study to assess whether MAOs are appropriately providing access to medically necessary services and making payment to providers consistently with Medicare coverage rules. Since CMS pays MAOs principally by capitation, MAOs have a potential incentive to increase their profits by denying access to care of beneficiaries or by denying payments to providers. CMS’s annual audits of MAOs have indicated some persistent problems related to inappropriate denials of service and payment. As enrollment in Medicare Advantage continues to grow, OIG viewed it as important to ensure that medically necessary care is provided and that providers are paid appropriately.

OIG conducted the review by randomly selecting 250 denials of prior authorization requests and 250 payment request denials by 15 of the largest MAOs during a week in June of 2019. OIG had coding experts review the cases and had physician reviewers examine the medical records. Based on these reviews, OIG estimated the rates at which MAOs issued denials of services or payment that met Medicare coverage rules and MAO billing rules. OIG also examined the reasons for the inappropriate denials and the types of services involved.

Standards

MAOs must cover items and services included in fee-for-service Medicare, and may also elect to include additional items and services. MAOs are required to follow Medicare coverage rules that define what items and services are covered and under what circumstances. As the OIG states in the Report, MAOs “may not impose limitations – such as waiting periods or exclusions from coverage due to pre-existing conditions — that are not present in original Medicare.” In following Medicare coverage rules, MAOs are permitted to use additional denial criteria that were not developed by Medicare when they are deciding to authorize or pay for a service, provided the clinical criteria are “no more restrictive than original Medicare national and local coverage policies.” MAOs may also have their own billing and payment procedures, provided all providers are paid accurately, timely, and with an audit trial.

MAOs utilize prior authorization requests before care is furnished to manage care and payment requests from providers to approve payment for services provided. Beneficiaries and providers may appeal such decisions, and beneficiaries and providers are successful in many of the appeals (for a one-time period, as many as 75% of the appeals were granted).

Findings

Prior Authorization Denials

In the study, OIG found that 13% of prior authorization denials were for services that met Medicare coverage rules, thus delaying or denying care that likely should have been approved. MAOs made many of the denials by applying MAO clinical criteria that are not part of Medicare coverage rules. As an example, a follow-up MRI was denied for a beneficiary who had an adrenal lesion that was 1.5 cm in size, because the MAO required the beneficiary to wait one year for such lesions that are under 2 cm in size. OIG’s experts found such a requirement was not contained in Medicare coverage rules and was therefore inappropriate. Rather, the MRI was medically necessary to determine if the lesion was malignant.

OIG also found instances where MAOs requested further documentation that led to a denial of care when it was not furnished, as such additional documentation was not required to determine medical necessity. OIG’s reviewers found that either sufficient clinical information was in the medical record to authorize the care or the documentation requested was already contained in the medical record.

Payment Denials

OIG found in the study that 18% of payment denials fully met Medicare coverage rules and MAO payment policies. As a result of these denials, payment was delayed or precluded for services that should have been paid.

OIG found that common reasons for these inappropriate payment denials were human error in conducting manual reviews (for example, the reviewer not recognizing that a skilled nursing facility (SNF) was an in-network provider), and inaccurate programming.

OIG also found that advanced imaging services (including MRIs and CT scans), stays in post-acute facilities (including SNFs and inpatient rehabilitation facilities), and injections were the services that were most prominent in the inappropriate denials that should have been authorized for care and payment in accordance with Medicare coverage rules.

OIG Recommendations

Based on the study, OIG recommended that:

  • CMS should issue new guidance on both the appropriate and inappropriate use of MAO clinical criteria that are not contained in Medicare coverage rules. In particular, OIG recommended that CMS should more clearly define what it means when it states that MAO clinical criteria may not be “more restrictive” than Medicare coverage rules.

  • CMS should update its audit protocols to address issues identified in the report such as MAO use of clinical criteria and/or examine particular service types that led to more denials. OIG suggests CMS should consider enforcement actions for MAOs that demonstrate a pattern of inappropriate payment denials.

  • CMS should direct MAOs to identify and address the reasons that led to human errors.

CMS reviewed the OIG report and concurred with each of OIG’s recommendations. Those recommendations can affect future coverage decisions as well as utilization of prior authorization tools. AHIP, a national association of health care insurers, challenged the OIG’s sample size as inappropriate to support the agency’s conclusions, and defended prior authorization tools.

Takeaways

Given CMS’s concurrence with the report’s findings, we recommend that MAOs track these issues over the next several months in advance of CMS’s Final Rate Announcement for CY 2024.

MAOs should also be aware of potential False Claims Act (FCA) exposure in this area. FCA exposure can arise when a company seeks and receives payments despite being out of compliance with the basic terms for its participation. If an MAO knew it was denying claims that should be paid because they would be covered under traditional Medicare, but the MAO was still collecting full capitation, it is possible that a whistleblower or the government may pursue FCA liability. This risk warrants attention because whistleblowers can bring qui tam suits under the FCA, with resulting high costs for defense and potentially high penalties if a violation is proven (or settled to avoid further litigation). That said, an FCA suit based on this theory would raise serious questions, including whether any non-payment actually met the FCA’s “knowingly” standard (which includes reckless disregard), or whether any non-payment met the materiality threshold necessary to demonstrate a violation of the FCA.

© 2022 Foley & Lardner LLP

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.

© 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.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

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.