Tag: health care

Ransomware Strikes California Hospital – Could You Be Next?

digitallife03-111715In a chain of events that should be a wake-up call to any entity using and storing critical health information (and indeed, ANY kind of critical information), Hollywood Presbyterian Medical Center (“HPMC”) has announced that it paid hackers $17,000 to end a ransomware attack on the hospital’s computer systems. On February 5, HPMC fell victim to an attack that locked access to the medical center’s electronic medical record (“EMR”) system and blocked the electronic exchange of patient information. Earlier reports indicated that the hackers had originally demanded $3,400,000.Such “ransomware” attacks are caused by computer viruses that wall off or encrypt data to prevent user access. Hackers hold the data ransom, demanding payment for the decryption key necessary to unlock the data. The attacks are often caused by email phishing scams. The scams may be random or target particular businesses or entities. In the case of HPMC, the medical center’s president and CEO indicated to media outlets that the attack was random, though Brian Barrett, writing for Wired, questioned that assertion. The medical center’s announcement of the resolution of the incident indicates that there is no evidence that patient or employee information was accessed by the hackers as part of the attack. Even if the data was not compromised, the attack led to enormous hassles at the hospital, returning it to a pre-electronic record-keeping system.

We have seen many variations of the ransomware attacks on the increase lately.   Cryptolocker and Cryptowall are the two most prevalent threats, but a Forbes article about the HPMC attack revealed that HPMC was victimized by a variant called “Locky,” which, according to the Forbes article, is infecting about 90,000 machines a day.

Details of the HPMC Incident

On February 2, 2016, three days before the HPMC attack, the Department of Health & Human Services Office for Civil Rights (“OCR”) announced the launch of its new Cyber-Awareness Initiative. That announcement included information on ransomware attacks and prevention strategies. Suggested prevention strategies from OCR included:

  1. Backing up data onto segmented networks or external devices and making sure backups are current.  That protects you from data loss of any kind, whether caused by ransomware, flood, fire, loss, etc.  If your system is adequately backed up, you may not need to pay ransom to get your data unlocked.

  2. Don’t be the low-hanging fruit:  Ensuring software patches and anti-virus are current and updated will certainly help.   Many attacks rely on exploiting security bugs that already have available fixes.

  3. Installing pop-up blockers and ad-blocking software.

  4. Implementing browser filters and smart email practices.

Most of these prevention strategies are HIPAA security and overall general business security measures that ought to be in place for companies across the board. As OCR and the FBI (see below) both indicate, smart email practices and training the workforce on them are key elements to preventing phishing scams.

FBI on Ransomware

One of the big questions arising out of the HPMC and other ransomware cases is:  do we pay?   If your business is about to grind to a halt, you likely have no choice.    However, the incident should first be reported to the FBI and discussed with forensics and legal experts who have experience with ransomware in particular. The FBI’s Ransomware information page provides some tips.  Ransomware attacks should be part of your incident response plan and the “what do we do” should be discussed at the highest levels of the company.

When in Doubt, Don’t Be a Click Monkey!

Before clicking on a link in an email or opening an attachment, consider contextual clues in the email. The following types of messages should be considered suspicious:

  • A shipping confirmation that does not appear to be related to a package you have actually sent or expect to receive.

  • A message about a sensitive topic (e.g., taxes, bank accounts, other websites with log-in information) that has multiple parties in the To: or cc: line.

  • A bank with whom you do not do business asking you to reset your password.CodeMonkey-68762_960x3601

  • A message with an attachment but no text in the body.

All businesses in any sector need to take notice of the HPMC attack and take steps to ensure that they are not the next hostages in a ransomware scheme.

Article By Cynthia J. Larose & Kate F. Stewart of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
©1994-2016 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

3 Takeaways from the Recent Ruling on Statistical Extrapolations in CMS Audits

On Jan. 20, 2016, a federal district court in the Western District of Texas affirmed a decision of the Medical Appeals Council (Appeals Council) affirming a CMS contractor’s extrapolation methodology used to assess an overpayment of more than $773,000 from a home health provider, Maxmed. Three key takeaways from the Court’s decision that may help health care providers avoid a similar situation include:

  1. Providers should be keenly aware of the rules limiting CMS’s participation as a party to an appeal when devising their appeal strategies, and its subsequent ability to appeal the ALJ decision on its own. Similarly, they should be aware of the Medicare Appeals Council’s ability to review any ALJ decision or dismissal on its own motion, or with referral from CMS.

  2. When disputing a statistical sample and/or extrapolation, submit an expert’s opinion as soon in the appeals process as practicable, preferably at the redetermination stage. When a statistical extrapolation is disputed, the Qualified Independent Contractor relies on its own statistical expert (often times an outside accounting firm). If you can overturn the extrapolation in the first two levels of appeal, and you don’t seek ALJ review, CMS cannot overturn the determination.

  3. CMS’s rules for statistical extrapolation balance its competing interests in reaching an accurate estimate of the overpayment: limited resources vs. accuracy. CMS admits in its manuals that it does not require the most accurate estimate, and will compromise on reaching the most accurate estimate by accepting a lower bound estimation. Therefore, CMS will trade a more imprecise statistical extrapolation for a lower overpayment estimate. Knowing this can help you and your statistical expert craft a more effective argument to try and get the statistical sampling thrown out.

Background

The case arose out of a post-pay investigation by the Zone Program Integrity Contractor (ZPIC) Health Integrity, which denied 39 of 40 sampled Maxmed claims in a post-payment audit. Health Integrity then used a statistical extrapolation to calculate an estimated overpayment of $773,967.00.

Appeals

After the Medicare Administrative Contractor Palmetto GBA and Qualified Independent Contractor confirmed Health Integrity’s findings, Maxmed appealed to an Administrative Law Judge (ALJ). The ALJ found one denied claim in favor of Maxmed, and also concluded that Health Integrity’s extrapolation methodology was not valid because it did not conform to the Medicare Program Integrity Manual (MPIM).

Parties’ Arguments

In the appeal, Maxmed argued that Health Integrity’s sampling and extrapolation methodology was invalid because Health Integrity failed to record the random numbers it relied upon in forming the sample, its choice of sampling units based upon clusters of claim-lines resulted in a skewed distribution, and its precision level of 8 percent resulted in an unacceptably imprecise extrapolation.

Court’s Decision

The court agreed with the Appeals Council, and granted summary judgment to HHS, finding that, “substantial evidence supported the Appeals Council’s overall determination that the ALJ erred by invalidating the statistical sampling and overpayment extrapolation.”

© Polsinelli PC, Polsinelli LLP in California
  • See more at: http://www.natlawreview.com/article/3-takeaways-recent-ruling-statistical-extrapolations-cms-audits#sthash.s4lBCnDo.dpuf

Gun Control: HIPAA Final Rule Targets Background Checks and Mental Health Reporting

President Obama has announced plans to tighten gun control regulations, including applying the background check requirement to dealers at gun shows and on websites.  Federal law already requires that those “engaged in the business” of selling guns must have a Federal Firearms License (FFL) and conduct background checks at the time of every purchase.  Some sellers assert they are not gun dealers but collectors or hobbyists who do not sell regularly and, therefore, are not “engaged in the business” of selling firearms and not required to have a FFL and conduct background checks.  The Obama administration has clarified that people who claim to be hobbyists may be engaged in the business if, for example, they operate an online gun store, frequently sell guns in their original packaging, or pass out business cards.  The Bureau of Alcohol, Tobacco and Firearms (“ATF”) issued Guidance to help individuals understand when a FFL is required.

Consistent with this initiative, the Office for Civil Rights (“OCR”) released a Final Rule modifying the Health Insurance Portability and Accountability Act (“HIPAA”) Privacy Rule to permit certain covered entities to disclose identifying information on persons subject to a “Federal mental health prohibitor “ to the National Instant Criminal Background Check System (“NICS”).

Intersection of NICS and HIPAA

As background, the NICS is a national system mandated by the Brady Handgun Violence Prevention Act of 1993.  Maintained by the FBI since November 1998, NICS is used by Federal Firearms Licensees to instantly determine whether an individual seeking to buy firearms is eligible to do so.  Federal law provides that it is unlawful for certain categories of persons to ship, transport, possess, or receive a firearm.  These categories are referred to as “prohibitors.” Among them  are the following mental health prohibitors, which provide that it is unlawful for the following individuals to possess a firearm:

  • individuals who have been involuntarily committed to a mental institution, for reasons such as mental illness or drug use;

  • individuals found incompetent to stand trial or not guilty by reason of insanity; or

  • those otherwise determined by a court, board, commission or other lawful authority to be a danger to themselves or unable to manage their own affairs as a result of marked subnormal intelligence, or mental illness, incompetency, condition or disease.

Many of the records qualifying an individual for a Federal mental health prohibitor are maintained by the criminal justice system, which does not generally include HIPAA covered entities.  However, some qualifying information may be housed within HIPAA covered entities that are either (i) involved in involuntary commitments or mental health adjudications; or (ii) have been designated by states to serve as repositories to collect applicable mental health data and report it to the NICS.

In balancing individuals’ privacy with public safety, the Final Rule modifies HIPAA to permit the disclosure of select demographic information to the NICS by covered entities that either (i) function as repositories of information relevant to the Federal mental health prohibitor on behalf of the state; or (ii) are responsible for ordering the involuntary commitments or other adjudications.  The Final Rule limits disclosure to demographic and other information needed for purposes of reporting to the NICS, and disclosure of diagnostic or clinical information is not permitted.

Potential Impact on Mental Health Legislation

This Final Rule is one aspect of a multi-faceted approach the Obama administration is taking on gun control.  An open question remains as to whether Congress will act with respect to gun control and mental health, and if so, how?  Certain Republicans are already looking for ways to halt President Obama’s actions, while, others in Congress do not believe that the actions go far enough and seek additional gun control measures.

At a minimum, the President’s decision to take action related to gun controls is certain to have an impact on mental health legislation.  Congressional Republicans have been discussing improving the nation’s mental health system since 2013.  Many see this focus on mental health as an effort to redirect the conversation away from gun control.  As such, the President’s recent actions propose adding $500 million to increase access to mental health care.

The combination of Republicans seeking to dismantle the recent executive actions, while redirecting the conversation to mental health may place Senate Democrats in a tough position.  The President’s action increases the likelihood that gun control measures may be attached to mental health legislation.  The issue is whether Senate Democrats are willing to filibuster mental health legislation in order to keep the focus on gun control and prevent the unraveling of some of the President’s executive actions.

Article By Lauren M. Moldawer, M. Daria Niewenhous & Rodney L. Whitlock of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

©1994-2015 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

Hacking Health Care: When Cybersecurity Can Mean Life or Death

cybersecurityMillions of Americans rely on implantable medical devices to stay alive. These battery-operated devices communicate through wireless transmissions — and can be hacked like any other wireless device. For example, a wireless pacemaker regulates a person’s heartbeat and records the heart’s activity, and then transmits this information to doctors who can reprogram the pacemaker. The interconnectivity between medical devices and clinical systems leaves wireless medical devices vulnerable to security breaches.

Cybersecurity no longer just applies to computer networks and financial data; modern implantable medical devices have the same vulnerability and also require cybersecurity. In fact, in a span of six months, hackers attempted to log into MRI and defibrillator machines over ten thousand times and attempted to download malware approximately 300 times. Had these hackers been successful, they could have accessed patients’ personal information or reprogrammed the defibrillators to deliver deadly jolts of electricity to patients’ hearts.

The government is already taking action. In 2014, the U.S. Food and Drug Administration (FDA) responded to these threats with guidance on how medical device manufacturers could improve the safety of implantable medical devices. The FDA advised manufacturers that their failure to develop cybersecurity controls could lead to repercussions including “compromised device functionality, loss of data (medical or personal) availability or integrity, or exposure of other connected devices or networks to security threats. This in turn may have the potential to result in patient illness, injury, or death.”

[I]n a span of six months, hackers attempted to log into MRI and defibrillator machines . . .

Further, as manufacturers well know, when a device malfunctions and causes bodily injury, consumers typically allege product liability claims. Patients whose devices are hacked could raise claims for design defects and failure to warn of the risk of cyber-vulnerabilities. These potential victims likely never considered their life-saving medical devices could be used as a weapon. For most people, the idea that someone would attack a medical device seems unfathomable.

So, what motivates attacks on implanted medical devices? According to Dr. William Maisel, “[m]otivation for such actions might include the acquisition of private information for financial gain or competitive advantage; damage to a device manufacturer’s reputation; sabotage by a disgruntled employee, dissatisfied customer or terrorist to inflict financial or personal injury; or simply the satisfaction of the attacker’s ego.” Medical data can be worth ten times as much as a credit card number. Added to that, the medical device market was a $25.2 billion industry in 2012 and is expected to be a $33.6 billion industry by 2018. That’s a vast market of potential victims.

Article By Amy M. Rubenstein & Brittany Robbins of Schiff Hardin LLP
© 2015 Schiff Hardin LLP

Five Telemedicine Trends Transforming Health Care in 2016

Telemedicine is a key component in the health care industry shift to value-based care as a way to generate additional revenue, cut costs and enhance patient satisfaction. One of the biggest changes to health care in the last decade, telemedicine is experiencing rapid growth and deployment across a variety of applications.

The quick market adoption of telemedicine is fueled by powerful economic, social, and political forces — most notably, the growing consumer demand for more affordable and accessible care. These forces are pushing health care providers to grow and adapt their business models to the new health care marketplace.

Simultaneously changing is the misconception that telemedicine creates a financial strain or relies on grant funding. Smart health system leadership are creating sustainable telemedicine arrangements that generate revenue, not just cost savings, while improving patient care and satisfaction. Research conducted by the American Telemedicine Association reveals that telemedicine saves money for patients, providers, and payers compared to traditional health care practices, particularly by helping reduce the frequency and duration of hospital visits.

It is expected that the global telemedicine market will expand at a compound annual growth rate of 14.3 percent through 2020, eventually reaching $36.2 billion, as compared to $14.3 billion in 2014. And while the growing demand for convenience, innovation, and a personalized health care experience may be the greatest factor, other forces are at work as well.

These five trends will drive telemedicine’s continued growth and transformation of health care delivery in 2016:

1. Expanding Reimbursement and Payment Opportunities

Both private and government payers will continue to expand telemedicine coverage as consumers gain experience with the technology and increasingly demand access to telemedicine-based services. Some health plans have already begun bolstering their coverage of telemedicine, which they view as a form of value-based care that can improve the patient experience and offer substantial cost savings. On the government side, 2016 will particularly see more coverage among Medicaid managed care organizations and Medicare Advantage plans.

While reimbursement was the primary obstacle to telemedicine implementation, new laws requiring coverage of telemedicine-based services have been implemented at the state level, and 2016 will be the year these laws drive implementation in those states. Similarly, providers are becoming increasingly receptive to exploring payment models beyond fee-for-service reimbursement, and 2016 will continue the growth of these arrangements. Examples include institution-to-institution contracts and greater willingness by patients to pay out-of-pocket for these convenient, valuable services.

2. Uptick in International Arrangements

In 2016, more U.S. hospitals and health care providers will forge ties with overseas medical institutions, spreading U.S. health care expertise abroad. These cross-border partnerships will provide access to more patients, create additional revenue and help bolster international brands. According to the American Telemedicine Association, more than 200 academic medical centers in the U.S. already offer video-based consulting in other parts of the world. While many of these are pilot programs, 2016 will see a maturation and commercialization of much of these international arrangements, as they are a win-win for participants in both countries.

The growing purchasing power of middle-class populations in countries like China is giving more patients the means and opportunity to pursue treatment from Western medical centers. We have seen both for-profit and non-profit models for international telemedicine — hospitals partnering with organizations in the developing world to expand health care availability or offering commercial care to customers in nations with areas of concentrated wealth but lacking the capabilities and access of Western health care.

3. Continued Momentum at the State Level

State governments across the U.S. are leading the way in telemedicine expansion. According to a study by the Center for Connected Health Policy, during the 2015 legislative session, more than 200 pieces of telemedicine-related legislation were introduced in 42 states. Currently, 29 states and the District of Columbia have enacted laws requiring that health plans cover telemedicine services. In 2016, we will see more bills supporting health insurance coverage for telemedicine-based services introduced in various state legislatures.

While state lawmakers are leading the way in incorporating telemedicine into the health care system, two recent developments point to a burgeoning interest at the federal level. The Centers for Medicare and Medicaid Services (CMS) is considering expansion of Medicare coverage for telemedicine, and a bill working its way through the U.S. House of Representatives would pay physicians for delivering telemedicine services to Medicare beneficiaries in any location.

4. Retail Clinics and Employer Onsite Health Centers on the Rise

A recent Towers Watson study found that more than 35 percent of employers with onsite health facilities offer telemedicine services, and another 12 percent plan to add these services in the next two years. Other studies suggest that nearly 70 percent of employers will offer telemedicine services as an employee benefit by 2017. The growth of nation-spanning telemedicine companies such as MDLIVE and the now publicly-traded Teladoc, which offer health services tailored to the specific needs of employers and other groups, is a reflection of the demand for these services.

Additionally, consumers are increasingly willing to visit retail medical clinics and pay out-of-pocket for the convenience and multiple benefits of telemedicine services when telemedicine is not covered by their insurance plans. Both CVS Health and Walgreens have publicly announced plans to incorporate telemedicine-based service components in their brick and mortar locations.

5. More ACOs Using Technology to Improve Care and Cut Costs

2016 will be the year of telemedicine and ACOs. Since the advent of Medicare Accountable Care Organizations (ACOs), the number of Medicare beneficiaries served has consistently grown from year to year, and early indications suggest the number of beneficiaries served by ACOs is likely to continue to increase in 2016. These organizations present an ideal avenue for the growth of telemedicine.

While CMS offers heavy cost-reduction incentives in the form of shared-saving payments, only 27 percent of ACOs achieved enough savings to qualify for those incentives last year. Meanwhile, only 20 percent of ACOs use telemedicine services, according to a recent study. We believe the widespread need to hit the incentive payment metrics, coupled with the low adoption rate will lead to significantly greater telemedicine use among ACOs in 2016.

Article By Nathaniel M. Lacktman of Foley & Lardner LLP
© 2015 Foley & Lardner LLP

Budget Deal Alters Reimbursement to Off-Campus Hospital-Owned Facilities

detailed illustration of a compass with medicare text, eps10 vectorOn November 2, 2015, President Obama signed into law H.R. 1314, the Bipartisan Budget Act of 2015 (the “Act”), which significantly changes Medicare reimbursement for off-campus hospital services. The Act, which Congress passed late last week, will alter Medicare reimbursement for new off-campus hospital-owned facilities that have heretofore been treated as “hospital-based.” Off-campus facilities for which a hospital was not billing as “hospital-based” as of the date of the enactment of the Act will not be treated as “hospital-based,” and the physician or other provider’s fee schedule rate, instead of the hospital outpatient rate, will apply.

Prior to the Act, covered out-patient department (“OPD”) services included services provided by facilities meeting the complex hospital-based rules, even if the facility was not physically-located on the campus of the hospital. Subject to the grandfather provision discussed below, the Act adds a specific exclusion to the definition of covered OPD services, making services furnished by an off-campus outpatient department of a hospital ineligible. The Act provides that a facility is “off-campus” if it is not within 250 yards of the hospital’s main buildings (including for this purpose, a “remote location of a hospital,” meaning a separate in-patient campus of the hospital, which is a helpful clarification in an otherwise problematic law). Facilities deemed “off-campus” are ineligible for Medicare reimbursement at the hospital outpatient rate.

The inclusion of a grandfather provision will mitigate some of the Act’s impact, as facilities currently treated as “hospital-based” will not be impacted by the change in law. Only facilities that are not billing as “hospital-based” as of the date of enactment will be ineligible for reimbursement at the hospital outpatient rate. It is unclear whether a conveyance of an off-campus grandfathered facility would eliminate the grandfathered status and the ability of the buyer to bill for the services as “hospital-based.” The Congressional Budget Office (“CBO”) forecasts that the government will reap significant cost savings from the lower rates that will apply; an October 28, 2015 analysis from the CBO projects that the change in reimbursement policy will provide $9.3 billion in relief by 2025.

Article By Edward S. Kornreich, Roger A. Cohen & Julia B Bienstock of Proskauer Rose LLP

© 2015 Proskauer Rose LLP.

Special Edition Health Care Law Update – November 11, 2014

Mintz Levin Law Firm

Elections Wrap Up, Lame Duck Preview, and a Changing Congress

In this ML Strategies Special Edition Health Care Update, we bring you a detailed look at two of the most pressing health care policy topics facing policymakers:

  1. Sorting out Congressional leadership changes post-midterm elections and looking ahead to the  upcoming Lame Duck session of Congress; and
  2. Monitoring the rapidly escalating effort to combat the Ebola epidemic.

Impact of Midterm Elections

On November 4th, voters cast their ballots giving the Republican Party control of the upcoming 114th Congress. Looking ahead to the new Congress, there will be some significant changes to the leadership on Committees of jurisdiction. While leadership will not be officially decided until Congress convenes in January, some predictions are below.

  • Senate Finance Committee: Senator Orrin Hatch (R-UT) will chair the Committee. As Chairman, Hatch is expected to focus on tax reform and is likely to advance his bill S. 232, to repeal the Affordable Care Act’s (ACA) excise tax on medical devices as part of this process. Hatch can also be expected to push for additional transparency from the Department of Health and Human Services (HHS) and support policy changes to the ACA such as we have seen the House pass in the 113th Congress. Senator Ron Wyden (D-OR) will be the ranking member. Hatch and Wyden have a strong working relationship and share interest in tax reform. Wyden is also a strong supporter of the ACA and is unlikely to support repealing or replacing the health care law, be they partial or wholesale proposals. On the whole, Democrats will likely have to cede at least two seats to the Republicans, meaning they will have to drop at least one member from the committee.
  • Senate Health, Education, Labor and Pensions (HELP) Committee: Senator Lamar Alexander (R-TN) is expected to chair the HELP Committee. Alexander will likely turn first to Ebola, should there be lingering issues unresolved after the Lame Duck. Alexander and the Committee’s current chair, Senator Tom Harkin (D-IA), introduced a bill to accelerate the development of Ebola treatments and vaccines. Alexander will also try to chip away at the ACA. In the past, he has said the Committee will vote early in the next Congress to repeal the ACA, though he conceded that the law will stay in effect as long as President Obama is in office. Alexander is more optimistic about tweaks to the ACA. Among his top priorities are addressing wellness, passing a 40 hour work week bill, and tackling small business insurance.

The Democrats have yet to pick their ranking member. As Senator Barbara Mikulski (D-MD) will opt for the ranking membership of the Appropriations Committee, Senators Patty Murray (D-WA), Bernie Sanders (I-VT), and Bob Casey (D-PA) could all be the lead Democrat on the Committee. The subcommittee chairs will likely be Senator Mike Enzi (R-WY) for Children and Families, Senator Richard Burr (R-NC) for Primary Health and Aging, and Senator Johnny Isakson (R-GA) for Employment and Workplace Safety.

  • House Energy and Commerce Committee: Representative Fred Upton (R-MI) will continue to chair the Committee. His agenda will resemble that in the 113th Congress, promoting the 21st Century Cures Initiative, which, among other things, promotes accelerated discovery of cures, streamlined development of drugs and devices, and greater use of health care technology to offset rising health care costs. He will also likely continue to try and reign in various provisions of the ACA. Other than the law’s repeal, which the Committee will likely take up at the start of the next Congress, Upton may seek to scuttle the employer mandate and the medical device tax. In addition, he may seek to overhaul or even dismantle the Independent Payment Advisory Board (IPAB), which would administer provider cuts unilaterally if certain spending thresholds are surpassed. Upton recently released the Committee’s record of success webpage and outlined several priorities for the new Congress, including building on the work already done on the 21st Century Cures Initiative.

On the Democratic side, with Representatives Henry Waxman (D-CA) and John Dingell (D-MI) retiring, Representative Frank Pallone (D-NJ) is in line to be ranking member. However, Minority Leader Pelosi has been a strong advocate for Representative Eshoo to take the Ranking Membership. With top slots opening up on other committees because of midterm losses, some congressional analysts believe that Pallone could end up moving back to the Natural Resources committee in place of Rep. Peter DeFazio (D-OR), who is likely to become Ranking Member on the House Transportation and Infrastructure Committee, following the loss of current Ranking Member Nick Rahall (D-WV). Of the 10 or so House Democrat losses, including Representatives John Barrow (D-GA) and Brad Schneider (D-IL), that are official, the majority of them have indicated explicitly, or have been characterized by others, as Pallone supporters- so it will be interesting to see how that plays out if it comes down to the last few votes.

  • House Ways and Means Committee: Representatives Paul Ryan (R-WI) and Kevin Brady (R-TX) are jockeying for the chairmanship, but it is widely believed that Representative Ryan will most likely prevail. Like Senator Hatch, Ryan will focus on tax reform. He will inherit Chairman Camp’s template, which he’ll likely keep with some changes. This effort could very well effect the health care community should Ryan join Senator Hatch in an attempt to repeal the medical device tax. Ryan will also address health care, separate from taxes, including holding hearings to critique the law and to demand more transparency and build on efforts in the 113th Congress to pursue Medicare fraud, waste, and abuse legislation. Representative Sander Levin (D-MI) is expected to remain the Ranking Member. However, House Democrats are eyeing Representative Chris Van Hollen (D-MD) to rejoin the committee. A budget expert with a strong grasp on tax policy, Van Hollen could serve as a vocal counterweight to Ryan, reprising a role he played opposite Ryan on the Budget Committee.

Lame Duck Preview

President Obama, who began his presidency with a Democratic majority in the Congress, will now round out his last two years in office with a Republican majority. This leaves the upcoming Lame Duck session as the last opportunity for the president and his Democratic colleagues in the Senate to set the legislative agenda.

Among one of the items most likely to pass is the FY 2015 appropriations legislation. With no appropriations legislation finalized prior to recessing for elections, Congress approved a short-term Continuing Resolution (CR) funding the Federal government at Fiscal Year 2014 levels through December 11, 2014. Before the CR expires, the Lame Duck Congress will likely pass either: 1) another short-term CR running through February or March 2015; 2) a long-term CR for the remainder of the fiscal year ending on September 30, 2015; or 3) an Omnibus appropriations bill setting new spending levels for FY15. Additionally, in the days after the midterm election, President Obama submitted an emergency funding request of $6.18 billion for the fight against Ebola and will push Congress to pass the request during the Lame Duck.

The Lame Duck offers some hope of passing a permanent solution to the Medicare physician payment formula, also known as the “SGR” or the “Doc Fix.” Looking to vehicles such as tax extenders or an omnibus spending bill, Congress still must determine how to pay for reforming the SGR. Members of the House GOP Doctors Caucus wrote to House leadership requesting that Congress take up SGR reform before the end of the year. The letter notes that the Lame Duck is a unique opportunity to bring much-needed stability to the Medicare program that will benefit seniors and physicians alike and requested more discussions on offsetting an SGR repeal.

While stakeholders and experts remain skeptical that such an effort would be successful, lawmakers are pulling out all the stops to engage industry to support a potential SGR fix this year. However, the current temporary extension of the SGR patch continues through March 2015, meaning that action could slip to next year.

Should Congress attempt to push through a comprehensive SGR bill in the Lame Duck, this would provide a vehicle for other Medicare proposals that are kicking around the House Ways and Means Committee—including Representative Brady’s draft fraud, waste, and abuse package, Protecting Integrity in Medicare Act of 2014 (PIMA), and Medicare extenders. Representative Brady reportedly wanted to introduce PIMA in the Lame Duck and, if there is bipartisan interest, pass the legislation under suspension. However, there has been no groundwork laid for this package in the Senate, so passing the package without a larger vehicle (such as SGR) may be unlikely.

Ebola Epidemic and Lame Duck Response

On November 4th, President Obama convened his national security and public health teams to discuss Ebola preparedness at home and the whole-of-government approach to contain the epidemic at its source in West Africa. The President’s advisors noted HHS’ efforts to ensure U.S. hospitals and the broader health system are prepared to identify, isolate, and treat patients. The team also discussed the screening of individuals traveling from the affected West African countries and the monitoring requirements these individuals are subject-to upon arrival in the U.S. There was consensus that, despite initial signs of progress in Liberia, the international community must continue to attack the problem aggressively at the source of the epidemic in West Africa.

Following this meeting, the Obama Administration announced it is seeking $6.18 billion through an emergency funding request to Congress to enhance efforts to address the Ebola crisis. The White House has requested $2.43 billion for HHS, including $1.83 billion for the Centers for Disease Control (CDC) to prevent, detect, and respond to the Ebola epidemic, $333 million for the Public Health and Social Services Emergency Fund (PHSSEF) for health worker training, manufacturing of synthetic therapeutics and vaccines, and modeling and genetic sequencing of the Ebola virus, $238 million for the National Institutes of Health (NIH) to conduct clinical trials of investigational vaccines and therapies, and $25 million for the Food and Drug Administration (FDA) to regulate Ebola vaccines and therapeutics. The Administration is also requesting $1.98 billion for USAID to scale up foreign assistance in West Africa, $127 million for the Department of State to support UN Mission for Ebola Emergency Response (UNMEER)operations, and a $1.54 billion contingency fund.

The President communicated this request to Congress in a November 5th letter to congressional leadership requesting that Congress consider his Administration’s $6.18 billion emergency appropriations request to implement a comprehensive strategy to contain and end the Ebola outbreak at its source in Africa, enhance domestic preparedness, speed procurement and testing of vaccines and therapeutics, and accelerate global capability to prevent spread of future infectious diseases. President Obama urged expeditious consideration of the proposal.

As we enter the Lame Duck, Congress is expected to tackle Ebola as a priority when it reconvenes. On November 12th, the Senate Appropriations Committee will hold a hearing on the U.S. Government response to the Ebola outbreak. Witnesses will include HHS Secretary Sylvia Matthews Burwell, CDC Director Dr. Tom Frieden, National Institute of Allergy and Infectious Diseases (NIAID) Director Dr. Anthony Fauci, DHS Secretary Jeh Johnson, Deputy Secretary of State for Management and Resources Heather Higginbottom, USAID Assistant Administrator for Democracy, Conflict, and Humanitarian Assistance Nancy Lindborg, Assistant Secretary of Defense for Special Operations and Low Intensity Conflict Michael Lumpkin, and Joint Chiefs of Staff Deputy Director for Political-Military Conflict James Lariviere.

On the heels of the Appropriations Committee hearing, the House Foreign Affairs Committee will hold a November 13th hearing to examine international and U.S. efforts to combat the Ebola epidemic in West Africa. The hearing, “Combating Ebola in West Africa: the International Response,” will feature witnesses including: USAID Administrator Rajiv Shah, State Department Deputy Assistant Secretary for the Bureau of African Affairs Bisa Williams, DOD Assistant Secretary of Defense for Special Operations and Low-Intensity Conflict Michael Lumpkin, DOD Deputy Director for Politico-Military Affairs (Africa) Major General James Lariviere, and DOD Joint Staff Surgeon Major General Nadja Y. West.

As Congress turns its attention to the Administration’s response, the FDA continues to work with industry to develop a vaccine to combat Ebola. Outlining a plan at an American Society of Tropical Medicine and Hygiene conference last week, Dr. Luciana Borio, head of the FDA’s Ebola response team, said the FDA is taking a “novel” approach and will test multiple drugs at once in an umbrella study with a single comparison group. This plan is intended to accelerate the testing process as patients will be paired with a drug and with someone from a comparison group to look for patterns.

* * *

Implementation of the Affordable Care Act

In-Patient Hospitalization Guidance: HHS and the Internal Revenue Services (IRS) released guidance stating that group health plans must cover hospitalizations in order to satisfy minimum value under the ACA. The guidance, which will be followed up by proposed regulations, states the agencies “believe that plans that fail to provide substantial coverage for in-patient hospitalization services or for physician services” do not meet minimum value requirements.

Other Federal Regulatory Initiatives

CMS Innovation Center Webinar: On November 10th, the Centers for Medicare & Medicaid Services (CMS) Innovation Center will hold a webinar to provide an update on the work of the Center and the models being tested to improve care for patients, communities, and lower costs. Dr. Patrick Conway, CMS Deputy Administrator for Innovation and Quality and CMS Chief Medical Officer, will be the lead presenter in the webinar.

New Members of the Health IT Policy Committee: HHS Secretary Burwell announced the appointment of a new member to the Health Information Technology Policy Committee (HITPC) and renewed appointments for three members of the Health IT Standards Committee (HITSC). The new appointment is Anjum Khurshid, director of the health systems division of the Louisiana Public Health Institute.

HHS Survey on Health Coverage: The HHS Assistant Secretary for Planning and Evaluation (ASPE) released the findings of a survey of health insurance coverage for 2013 and 2014. Among other things the survey finds that, as of June 2014, 10.3 million nonelderly Americans, age 18 to 64, gained health insurance coverage since the beginning of the ACA open enrollment.

HRSA Awards Mental Health and Substance Abuse Funding: The Health Resources and Services Administration (HRSA) announced $51.3 million in ACA funding to support 210 health centers in 47 states to establish or expand behavioral health services for nearly 440,000 people.

ONC Data Sheds Light on Attestation Rates: The Office of the National Coordinator for Health IT (ONC) released a data analytics update on the 2014 attestation experience. The update shows that 4,656 doctors and other eligible providers and 258 hospitals had attested to Stage 2.

CDC Releases Monitoring Guidance for Ebola: The CDC released updated monitoring and movement guidance defining four risk levels based on degree of exposure to Ebola. The guidance helps to ensure a system is in place to quickly recognize symptoms that may necessitate a person be routed to medical care.

Other Health Care News

Study of Marketplace Insurance Premiums: The Robert Wood Johnson Foundation and the Urban Institute released a study of public filings from 17 states and Washington, DC of marketplace insurance premiums in early approval states. The report finds that premium increases will be low, with 10 states increasing only 5 percent, 2 states increasing more than 5 percent, and 6 states seeing premium reductions.

Specialty Providers Press NAIC on Access: The Alliance of Specialty Medicine sent a letter to the National Association of Insurance Commissioners (NAIC) regarding draft policy models for individual and small group market health insurance coverage. The Alliance urged NAIC to ensure consumers have access to specialists without suffering high out-of-pocket costs.

WHO Recommends Overdose Policies: The World Health Organization, estimating that 69,000 people die a year from opioid overdose, advised that those likely to witness an overdose incident, such as family members, should be given access to the opioid antidote naloxone and trained in its use. The FDA approved use of naloxone injectors for family use in April 2014.

Survey of ICD-10 Preparation: The American Health Information Management Association and the eHealth Initiative released a survey of health delivery organizations and clinicians finding that 65 percent of respondents indicated that they could begin end-to-end testing prior to the fourth quarter of 2015 but that there remain concerns that revenue will decrease during the first year of ICD-10 compliance.

Georgetown University Survey of Children’s Insurance: Georgetown University’s Center for Children and Families found that in 2013, for the first time in five years, children’s health uninsured rates did not drop. The 2013 rate was 7.1 percent, compared to 7.2 percent in 2012. Since 2008, the number of uninsured children has shrunk from 6.9 million to 5.2 million.

Upcoming Congressional Hearings

Senate

On November 12th, The Senate Appropriations Committee will hold a hearing on the U.S. Government response to the Ebola outbreak.

House

On November 13th, the House Committee on Foreign Affairs will hold a hearing titled, “Combating Ebola in West Africa: The International Response.”

ARTICLE BY

Joseph P. Hammang, PhD
Alexander Hecht
Andrew J. Shin
Abby Matousek
OF
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Ebola and Bribery in Liberia?

steptoe-johnsonlogo

With today’s newscasts full of stories about a second Dallas healthcare worker contracting the Ebola virus, people are focused on this woman and the 75 other Dallas healthcare workers (and their pets!) being monitored for symptoms. So what does this have to do with our usual subject of international corruption? Plenty, as it turns out.

More than 4,000 people in Africa have died from the virus. The international community has put on a full court press to contain the virus. But families in Liberia, which is at the epicenter of the epidemic,are reportedly bribing retrieval teams to let them keep their loved ones’ bodies and give them traditional burials. Traditional Liberian funerals include surviving relatives washing the body and keeping it around for a wake that sometimes lasts days, while family and friends stop by to kiss the corpse before it is buried in a shallow grave in the family grave plot nearby.

The Liberian government has ordered that bodies be collected and cremated, and sends retrieval teams out to collect the bodies. But according to news reports, grieving relatives are paying $40 to $150 for death certificates that don’t show Ebola as the cause of death. Having Ebola carries a stigma in Liberia, and it is important to some families that they don’t have to admit that Grandma had the disease. The Liberian government has said that the retrieval teams do not have the authority to issue death certificates, but for $40, they are doing so anyway.

Half of the Ebola deaths have happened in Liberia, so one can imagine the confusion of a young man who lived next door to an Ebola victim. He told the Wall Street Journal that the government tells its citizens to call the body retrieval teams and not to touch the bodies themselves, but then the teams come and don’t insist on taking the corpses. “They told us not to bury the bodies. They told us to call. But now I am not sure if they are the ones trying to eradicate this virus or to make it grow.”

So a small bribe still carries the day in some locations, even in the face of a catastrophic dilemma. Companies doing business, or contemplating doing business, in west Africa are understandably wary of doing so now, and that’s the last thing this impoverished area needs.

Improving Medicare Post-Acute Care Transformation (IMPACT) Act to be Signed into Law

Drinker Biddle Law Firm

The Improving Medicare Post-Acute Care Transformation Act of 2014, known as the IMPACT Act, passed the House on September 16th. It was introduced in the House by Ways and Means Chairman Dave Camp (R-MI) and in the Senate by Finance Committee Chairman Ron Wyden (D-OR) on June 26, 2014. The Senate voted to approve the legislation on Thursday, September 18, meaning it will now be sent to President Obama for his signature.

The IMPACT Act establishes requirements for post-acute care (PAC) providers to report and share standardized assessment data, including patient assessments, quality measures, and information about resource use. The bill gives various facilities between two and just over four years to implement processes that allow them to report different kinds of data. The legislation also directs the Medicare Payment Advisory Commission (MedPAC) to evaluate payment systems that consider individual characteristics rather than just the type of facility at which a patient is treated. The new data to be reported will help illustrate facility performance and could help determine if a payment system that takes patient outcomes into account is preferable.

Additionally, the bill directs the Secretary of Health and Human Services (HHS) to conduct two studies using additional data to determine what effect, if any, socioeconomic and other factors have on quality and resource use measures.  To learn more, read the District Policy Group bill summary, written by Legislative Assistant Sarah Williams here.

Read a summary from the Library of Congress here.

ARTICLE BY

Ilisa Halpern Paul
OF
Drinker Biddle & Reath LLP

Happy National Healthcare Decisions Day: Why an Advance Directive is a Crucial Part of Estate Planning

Varnum LLP

Today is a day that, until recently, I wasn’t aware had any independent significance other than being April 16. However, April 16 is – and has been for the past seven years – National Healthcare Decisions Day. You can see the website dedicated to this purpose here: www.nhdd.org

Planning with an advance directive for health care decisions is only one piece of the larger estate planning puzzle. But it is a crucial component of any estate plan, and far too few people take the advice of their doctors or lawyers to implement their own advance directives. Some polls suggest only 30% of the population has implemented an advance directive.  However,this clip from NPR tells the story of La Crosse, Wisconsin, where over 96%  of the population has an advance directive. This has had at least two very important results: first, individuals are able to receive the medical care they want at a time when they cannot express their opinions; and second, medical costs for end of life care in La Crosse are far below the national average.

At a minimum, a carefully crafted advance directive will inform your family members about your wishes for your health care in the event you cannot make your own decisions. You can ensure that your family and your health care professionals know what you intend. You can avoid the need for the cost and hassle of a guardianship proceeding in probate court. And you can avoid unwanted medical procedures. The bottom line: an advance directive is an important part of ensuring that you receive the care you want when you cannot make your own decisions.

Article By:

Christopher J. Caldwell
Of: 
Varnum LLP