Tag: healthcare

Congress Awaits Health Provisions in President’s Budget

Health Bills Slated for House Floor Consideration; SAMHSA Releases Proposed Rule Focused on Confidentiality of Substance Use Disorder Patient Records

Legislative Activity

Congress Awaits Health Provisions in President’s Budget

On Tuesday, February 9, President Barack Obama will submit his FY 2017 Budget Request to Congress, which is expected to include several large-scale investments for the nation’s health. Last week, the White House released a “sneak preview” of the Budget, which includes: $755 million for cancer research as part of the “moonshot” to cure cancer; a legislative proposal to provide any state that takes up the Medicaid expansion option the same three years of full federal support that states that expanded in 2014 received; a commitment to changes in the excise tax on high-cost employer-sponsored health coverage, otherwise known as the “Cadillac Tax”; and $1 billion in mandatory funding over two years to address prescription drug abuse and heroin use.

On Wednesday, February 10, U.S. Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell will provide testimony on the Budget to the House Committee on Ways and Means. The next day, she will also address the Budget in her testimony to the Senate Committee on Finance.

Health Bills Slated for House Floor Consideration

House Majority Leader Kevin McCarthy (R-CA) has announced that several health care bills will be considered on the floor this week.

On Tuesday, the following pieces of health legislation are expected to be considered under suspension of the rules: H.R. 3016, the Veterans Employment, Education, and Healthcare Improvement Act, as amended, which clarifies the role of podiatrists in the Department of Veterans Affairs (VA); H.R. 3106, the Construction Reform Act of 2016, which makes certain changes in the administration of Department medical facility construction projects; H.R. 3262, To provide for the conveyance of land of the Illiana Health Care System of the Department of Veterans Affairs in Danville, Illinois; H.R. 4056, To authorize the Secretary of Veterans Affairs all right, title, and interest of the United States to the property known as “The Community Living Center” at Lake Baldwin Veterans Affairs Outpatient Clinic, Orlando, Florida, as amended; H.R. 4437, To extend the deadline for the submittal of the final report required by the Commission on Care; H.R. 3234, the VA Medical Center Recovery Act, which establishes within the VA an Office of Failing Medical Center Recovery; and H.R. 2915, the Female Veteran Suicide Prevention Act, which directs the Secretary of the VA to identify mental health care and suicide prevention programs that are effective in treating women veterans.

Later in the week, the House is expected to consider H.R. 2017, the Common Sense Nutrition Disclosure Act of 2015, which seeks to improve and clarify disclosure requirements for restaurants and other retail food establishments.

Senate HELP Committee to Mark Up Health Legislation

On Tuesday, February 9, the Senate Committee on Health, Education, Labor, and Pensions (HELP) will hold a markup to consider several health care bills. In January, Committee Chairman Lamar Alexander (R-TN) announced the Committee’s schedule for the “step by step” consideration of biomedical innovation bills. This process, aimed at legislation that is somewhat similar to language in the House-passed 21st Century Cures Act (H.R. 6), begins with this markup.

Legislation to be considered on Tuesday includes: S. 2030, the Advancing Targeted Therapies for Rare Diseases Act of 2015, which allows the sponsor of an application for the approval of a targeted drug to utilize data and information from the sponsor’s previously approved targeted drugs; S. 1622, the FDA Device Accountability Act of 2015, which requires the Food and Drug Administration (FDA) to ensure training on least burdensome requirements for employees who review premarket submissions of medical devices; S. 2014, the Next Generation Researchers Act, which seeks to demonstrate a commitment to our nation’s scientists by increasing opportunities for the development of future researchers; S. 800, the Enhancing the Stature and Visibility of Medical Rehabilitation Research at NIH Act, which seeks to improve, coordinate, and enhance National Institutes of Health (NIH) rehabilitation research; S. 849, the Advancing Research for Neurological Diseases Act of 2015, which provides for systematic data collection and analysis and epidemiological research regarding neurological diseases; S. ___, the Preventing Superbugs and Protecting Patients Act; and S. ___, the Improving Health Information Technology Act.

This Week’s Hearings:

  • Tuesday, February 9: The Senate Committee on Health, Education, Labor, and Pensions (HELP) will hold a markup of health care bills, as described above.

  • Wednesday, February 10: The House Committee on Energy and Commerce Subcommittee on Health will hold a hearing titled “Examining Medicaid and CHIP’s Federal Medical Assistance Percentage.”

  • Wednesday, February 10: The House Committee on Veterans’ Affairs will hold a hearing titled “U.S. Department of Veterans Affairs Budget Request for Fiscal Year 2017.”

  • Wednesday, February 10: The House Committee on Foreign Affairs Subcommittee on Africa, Global Health, Global Human Rights, and International Organizations and Subcommittee on the Western Hemisphere will hold a joint hearing titled “The Global Zika Epidemic: Emerging in the Americas.”

  • Wednesday, February 10: The House Committee on Ways and Means will hold a hearing titled “Department of Health and Human Services’ (HHS) Fiscal Year 2017 Budget Request.”

  • Wednesday, February 10: The House Committee on Rules will meet on H.R. 2017, the Common Sense Nutrition Disclosure Act of 2015.

  • Wednesday, February 10: The Senate Committee on the Judiciary will hold a hearing titled “Breaking the Cycle: Mental Health and the Justice System.”

  • Wednesday, February 10: The Senate Special Committee on Aging will hold a hearing which “will unveil and examine a new, troubling scam by global drug traffickers perpetrated against our nation’s seniors.”

  • Thursday, February 11: The House Committee on Veterans’ Affairs Subcommittee on Health will hold a hearing titled “Choice Consolidation: Improving VA Community Care Billing and Reimbursement.”

  • Thursday, February 11: The House Committee on Homeland Security Subcommittee on Emergency Preparedness, Response, and Communications will hold a hearing titled “Improving the Department of Homeland Security’s Biological Detection and Surveillance Programs.”

  • Thursday, February 11: The Senate Committee on Finance will hold a hearing titled “The President’s Fiscal Year 2017 Budget.”

  • Thursday, February 11: The Senate Committee on the Judiciary will hold a markup, which will include consideration of: S. 483, the Ensuring Patient Access and Effective Drug Enforcement Act of 2015, which seeks to improve enforcement efforts for prescription drug diversion and abuse; and S. 524, the Comprehensive Addiction and Recovery Act of 2015, which authorizes the Attorney General to award grants to address prescription opioid abuse and heroin use.

  • Friday, February 12: The House Committee on Energy and Commerce Subcommittee on Oversight and Investigations will hold a hearing titled “Outbreaks, Attacks, and Accidents: Combatting Biological Threats.”

Regulatory Activity

SAMHSA Releases Proposed Rule Focused on Confidentiality of Substance Use Disorder Patient Records

On Friday, February 5, the Substance Abuse and Mental Health Services Administration (SAMHSA) released a proposed rule titled “Confidentiality of Substance Use Disorder Patient Records.” The proposed rule seeks to amend the Confidentiality of Alcohol and Drug Abuse Patient Records regulations, which were last substantively updated in 1987. According to HHS, the proposed rule will “facilitate health information exchange to support delivery system reform efforts” and ensure privacy for patients seeking substance use disorder treatment.

The proposed rule will be published in the Federal Register on February 9, and comments are due April 11.

Article By Beth L. Goldstein of Squire Patton Boggs (US) LLP
© Copyright 2016 Squire Patton Boggs (US) LLP

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.

CMS’s Top 7 Changes to Stark Law

On November 16, 2015, the Department of Health and Human Services, Centers for Medicare and Medicaid Services, issued a final rule revising, clarifying, and adding exceptions to the Physician Self-referral Law (“Stark”) in order to (1) accommodate delivery and payment system reform; (2) reduce burdens; and (3) ensure and facilitate compliance. These changes include two new exceptions, clarifications adding additional explanations to existing policies, and revisions to existing definitions and exceptions.

Below are the top 7 changes providers and physicians should note:

  1. New “assistance to compensate a nonphysician practitioner (NPP)” exception: allows remuneration from a hospital, federally qualified health center, or rural health clinic to a physician to recruit a NPP, where substantially all (i.e., 75%) of the services furnished by the NPP to the patients of the physician’s practice are for primary care services or mental health care services. Please note this exception applies to the following NPPs: (1) physician assistants; (2) nurse practitioners; (3) clinical nurse specialists; (4) certified nurse midwives; (5) clinical social workers; and (6) clinical psychologists.

  2. New “timeshare arrangements” exception: this exception covers “use” arrangements only, which includes the use of premises, equipment (excluding advanced imaging equipment, radiation therapy equipment, and (most) clinical or pathology laboratory equipment), personnel, items, supplies, or services. Traditional office space leases and arrangements conveying a possessory leasehold interest in office space are not covered under this exception. Compensation for such arrangements must be carefully structured, as percentage compensation and per-unit services fees (i.e., “per-use” and “per-patient” rates) are prohibited but hourly or half day rates are acceptable.

  3. Clarification on the writing requirement: exceptions containing a writing requirement for certain compensation arrangements use “arrangement” and “agreement” interchangeably. The rule now clarifies that this requirement only requires an arrangement be set out in writing. Although CMS recommends having one signed written contract that satisfies every requirement of the exception, the preamble clarifies that this requirement may also be satisfied through a collection of documents that relate to one another and to the exact arrangement.

  4. Clarification on the 1-year term requirement for office space rental, equipment rental, and personal service arrangements exceptions: the final rule clarifies the arrangement itself must have a duration of at least one year, but a formal “term” provision in a contract is not required. Instead, the duration requirement can be shown through contemporaneous documents establishing the arrangement lasted for at least one year. However, if the arrangement was terminated during the first year, the parties must be able to show they did not enter into a new arrangement for the same space, equipment, or services during the first year.

  5. Clarification regarding “split bill” arrangements: “split bill” arrangements do not involve remuneration between physicians and designated health services (DHS) entities, for items or services such as examination rooms, nursing personnel, and supplies, “because the physician and DSH entity do not provide items, services, or other benefits to one another.” 80 Fed. Reg. 70,886, 71,321 (Nov. 16, 2015). However, outpatient departments billing a payor in one single bill will establish a compensation arrangement and must fit under an exception.

  6. Revision to “temporary noncompliance with signature” requirement: prior to this final rule, parties who inadvertently failed to comply with the signature requirement had 90 days to comply and others had 30 days. Now, there is a blanket 90 day period to comply with this requirement, regardless of whether the failure to obtain a signature was inadvertent or not.

  7. Indefinite holdover provisions: expired arrangements under the office space and equipment rental exceptions and the personal service arrangements exception can be “heldover” indefinitely rather than for only six months, provided the arrangement: (1) satisfies all of the requirements at the time of expiration; (2) continues on the same terms and conditions; and (3) continues to satisfy all of the requirements during the holdover. Current arrangements in a valid holdover under the current six month holdover provisions on January 1, 2016 may qualify for an indefinite holdover.

Article By

Bryna S. Hummel
Robert D. Nauman
John E. Wyand
Squire Patton Boggs (US) LLP

© Copyright 2015 Squire Patton Boggs (US) 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

Going Before a Higher Power – Nuns Take on Obamacare

On Nov. 6, 2015, the U.S. Supreme Court agreed to hear the appeals of several religious employers challenging the contraceptive mandate under the Patient Protection and Affordable Care Act (ACA).  The court will consolidate seven cases, the most prominent of which was brought by the Little Sisters of the Poor, an order of Catholic nuns who dedicate their lives to helping the elderly poor.  The other employers include several Catholic dioceses, a religious non-profit group and several Christian colleges.

The contraception mandate requires religious employers who object to providing contraceptive services to notify the government of their objection, which transfers the responsibility of providing those services to the employer’s insurer.  The petitioners argue that this procedure violates the Religious Freedom Restoration Act because it effectively forces the employer’s health plan to cover services the employer finds objectionable.  They argue that the government has less restrictive means available to provide these services.

The consolidation of these seven cases is particularly interesting because the employers have varied insurance arrangements.  While some of the employers are insured by large insurance carriers, others are self-insured, or have “church plans” as defined by ERISA.  It is unclear whether these different arrangements will affect the outcomes for the particular employers.

The court is expected to hear oral argument in the case in March 2016.

Article By Mark D. Scudder of Barnes & Thornburg LLP

© 2015 BARNES & THORNBURG 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.

Bipartisan Budget Act of 2015 – Potential Impact on Hospitals

House Republican leaders introduced legislation on Monday, finalizing a two-year budget agreement between Congressional leaders and the White House. This legislation is currently being considered and may be up for a vote as early as Wednesday on the bipartisan budget deal.

Hospitals should note the language in Section 603 (which is on pages 35-39 of the draft bill) codifies the definition of a “provider-based off-campus hospital outpatient department” (PBD HOPD) as a location that is not on the main campus of a hospital and is located more 250 yards from the main campus.  The section defines a “new” PBD HOPD as an entity that executes a CMS provider agreement after the date of enactment of the Act and that any NEW PBD HOPD executing a provider agreement after the date of enactment would not be eligible for reimbursements from CMS’ Outpatient Prospective Payment System (PPS).

Bipartisan Budget Act of 2015

Section-by-Section Summary

Article By Kevin J, Ryan of Epstein Becker & Green, P.C.

©2015 Epstein Becker & Green, P.C. All rights reserved.

UK Government Launches Cybersecurity Service For Healthcare Organizations

The UK government has announced a new national service providing expert cybersecurity advice to entities within the National Health Service (NHS) and the UK’s broader healthcare system.  The project, called CareCERT (Care Computing Emergency Response Team), is aiming for a full go-live in January 2016.

Acording to recent press releases, CareCERT will:

  • “Provide incident response expertise for the management of cyber security incidents and threats across health and care system”;

  • “Broadcast potential cyber threats and necessary actions to take across the sector, to ensure cyber threats are safely dealt with”;

  • “Be a central source of security intelligence for health and care by working with cross government monitoring partners such as GovCertUK and CERT-UK”;

  • “Support the analysis of emerging and future threats through unique analysis tools and reporting”; and

  • “Be a trusted source of security best practice and guidance”.

CareCERT will be run by the Health and Social Care Information Centre (HSCIC).  The HSCIC is an important offshoot of the UK Department of Health, overseeing information assurance and patient privacy within the NHS as part of its broader role in setting health IT standards, assisting IT rollout throughout the NHS, and managing the release of healthcare statistics for the NHS.

CareCERT is expected to be a natural evolution of HSCIC’s existing function and expertise.  In particular, under the HSCIC/Department of Health’s data breach reporting policy (imposed on NHS bodies and their suppliers through contract), HSCIC is already one of the bodies notified and involved in the event of serious data breaches in the public healthcare sector.  The creation of CareCERT will enhance the HSCIC’s incident response capabilities, and will give NHS suppliers an increased opportunity to engage with HSCIC proactively (for guidance and threat alerts), rather than only after serious incidents take place.

Article by Mark Young & Philippe Bradley-Schmieg of Covington & Burling

© 2015 Covington & Burling LLP

Four Ways Medicare and Medicaid Have Changed the Health Care Industry

It’s a bizarre program that is absolutely essential to American healthcare.

That is the opinion of Theodore Marmor, professor of public policy at Yale and author of the book, The Politics of Medicare. Whether you agree with him or not, it is difficult to deny the influence of Medicare and Medicaid on the health care industry. To mark the 50th anniversary of Medicare and Medicaid, signed into law by President Lyndon Johnson on July 30, 1965, we have identified four ways these programs have shaped the health care industry.

  1. There is no stopping the health care juggernaut. In a March 2014 presentation during the conference of National Health Care Journalists, Rosemary Gibson (senior advisor with The Hastings Center) brought the point home with this statistic: In 1965, there were no health care companies listed in the Fortune 100. By 2013, there were 15. 

  2. The federal government is now the largest purchaser of health care in the United States. In its Primer on Medicare, The Kaiser Family Foundation estimates that 14% of the $3.5 trillion spent by the federal government in 2014 was spent on Medicare (approximately $505 billion total), making it the largest purchaser of health care in the United States. Its spending power means CMS and Medicare will continue to hold sway in the industry.

  3. Medicare and Medicaid is driving innovation, but have they run out of gas? US News & World Report estimates that today, one in three Americans is covered by Medicare or Medicaid, and it is that extension of coverage to a larger population that is driving innovation. In the article, “America’s Health Care Elixir,” Kimberly Leonard states, “Because the government covered more people, and eventually extended that coverage to include drugs and medical devices, industries knew they could invest in research because they would eventually recoup the costs of their work through sales of new products.” However, innovation is beginning to outstrip the programs’ ability to keep pace. For example, Leonard states, “Pharmaceuticals also are moving toward developing more expensive biologic drugs, which could be a challenge for Medicare and Medicaid to afford.” More important, the programs’ outdated structure, developed during a different business environment, serving a different population, is making it difficult for them to keep pace with technology.

  4. Medicare and Medicaid helped end segregation in health care facilities. One lesser-known positive effect on the industry is that these programs helped end segregation, at least at health care facilities. The programs required that health care facilities could not be racially segregated if they wanted to receive Medicare and Medicaid payments, which meant facilities had to start accepting African-American patients.

With the changes introduced with the Affordable Care Act, it is clear that the government is keen on keeping these programs going for another 50 years or more, and their legacy of influence in the health care industry continues to evolve. Where they will be in 50 years remains to be seen.

ARTICLE BY Health Care Practice Group of Foley & Lardner LLP

© 2015 Foley & Lardner LLP

How Does the King v. Burwell Decision Affect the Affordable Care Act?

The Supreme Court handed the Obama administration a key victory, upholding the tax credits that allow many low-income Americans to purchase health care insurance in states where the federal government is running the insurance marketplace. These tax credits, available to Americans with household incomes between 100% and 400% of the federal poverty line, operate as a form of premium assistance that subsidizes the purchase of health insurance.

The petitioners in King v. Burwell, No. 14-114 (U.S. June 25, 2015), challenged a ruling from the Internal Revenue Service (IRS) and claimed that a phrase in the Affordable Care Act (ACA) indicating that the subsidies are only available to consumers buying insurance in a state-run exchange prohibited the federal government from providing tax credits where states have not established their own exchanges. Arguing that the text of the law should be read literally, they challenged an IRS regulation that makes these tax credits available regardless of whether the exchange is run by a state or the federal government.

But the Supreme Court sided with the Obama administration in its 6-3 decision, emphasizing that language allowing tax credits for health insurance purchased on “an Exchange established by the State” must be interpreted in context and within the larger statutory scheme. Chief Justice Roberts, who authored the majority opinion, wrote that the phrase “an Exchange established by the State” was ambiguous, and therefore required the Court to look to the broader structure of the law. He wrote that the larger statutory scheme required the Court to reject the petitioners’ interpretation, which would have destabilized the individual insurance market and would create the exact same “death spirals” of rising premiums and declining availability of insurance that the law was crafted to avoid. In passing the law, he added, Congress sought “to improve health insurance markets, not to destroy them.”

The Supreme Court’s analysis went a step beyond the traditional framework used by courts to review agency actions. This two-step analysis, first announced in Chevron U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) and widely known as the Chevrontwo-step, first considers whether the statutory language is clear—and if it is, the inquiry ends there. But if the language of the law is silent or ambiguous, a court next considers whether the agency’s interpretation of the statute is reasonable, granting considerable deference to the agency’s interpretation. Because the tax credits under the ACA are central to the reforms created by the law, Chief Justice Roberts explained, Congress would not have delegated such an important question to any agency, and especially not to the IRS, which lacks expertise in crafting health insurance policy. He wrote that in this case, the task of determining the correct reading of the statute belonged to the Court.

For most providers and companies involved in the health care system, the result of this decision means business as usual. But the decisive victory for the law today means that the ACA is here to stay, and will have a permanent effect on how patients access care. Insurers and providers still must overcome hurdles to achieve affordable premiums and provide improved care for patients across the country. And as more laws are sorted out in the courts, the Supreme Court’s reliance on context in interpreting the statute today could set an important precedent of emphasizing the purpose of major legislation when analyzing its trickier provisions.

ARTICLE BY Anna S. Ross of Foley & Lardner LLP

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