Capitol Hill Healthcare Update


The year-end schedules of the Senate HELP and Finance committees just became more clogged, as the two panels will lead the review of President Trump’s nominee to be Health & Human Services (HHS) secretary.

Trump announced this morning that he selected former HHS official Alex Azar as his choice to succeed former Secretary Tom Price. “Happy to announce, I am nominating Alex Azar to be the next HHS Secretary,” Trump tweeted this morning while still in Asia. “He will be a star for better healthcare and lower drug prices!”

Azar previously served at HHS during the George W. Bush administration as deputy secretary and general counsel. Most recently, he was a senior executive for Eli Lilly. Continue Reading

Capitol Hill Healthcare Update

December Most Likely Timetable for CHIP Even After House Approval

The House last week voted to renew the Children’s Health Insurance Program (CHIP) through 2022, but disagreements over how to pay for the program are likely to delay consideration in the Senate beyond this month.

On a mostly party line 242-174 vote, the House adopted the five-year extension along with a renewal of funding for community health centers. But the pay-fors House Republicans had identified – including tapping money from the Affordable Care Act’s (ACA’s) prevention fund and means-testing Medicare premiums for wealthy beneficiaries – were non-starters for most Democrats.

The Senate Finance Committee has its own version of CHIP renewal legislation that largely mirrors the House’s bill, except the Senate has not identified any offsets. Continue Reading

Capitol Hill Healthcare Update

House Plans CHIP Vote This Week but Final Action Not Likely Until December

House Majority Leader Kevin McCarthy (R-Calif.) said lawmakers will vote this week on legislation to renew federal funding for the Children’s Health Insurance Program (CHIP), even amid unresolved partisan disagreements over how to pay for it.

Republicans and Democrats on the House Energy and Commerce Committee have been trying to hash out competing offsets to pay for extending for five years the insurance program that covers nearly nine million children of low-income families. The bill also includes $1 billion to bolster Puerto Rico’s Medicaid program as part of general hurricane relief for the island.

Republicans on the committee want to pay for the CHIP extension by tapping money from the Affordable Care Act’s (ACA’s) prevention fund and increasing Medicare premiums for wealthy seniors. Democrats object to those pay-fors, and the two parties have not been able to develop a bipartisan solution. Continue Reading

Physicians in the Bulls-eye

Several recently reported cases highlight the growing risk physicians face if they succumb to competitive pressures, especially offers of remuneration from labs, pharmacies, home health agencies and other providers to whom they refer. In many cases, the effort to recoup fees may come years after the physician received and spent the fees, with no insurance coverage for the defense of the claim and/or to satisfy any potential liability.

Bankruptcy Trustee Recoups Specimen Handling Fees Paid to Physicians

The bankruptcy trustee for a diagnostic laboratory (Lab) filed over 1,000 lawsuits against physicians attempting to recoup, for the benefit of the Lab’s creditors, what he claimed to be excessively large specimen processing and handling fees paid to physicians. In 2015, the Lab agreed to pay $47 million to the U.S. Department of Justice (DOJ) to resolve allegations that it paid kickbacks to physicians in connection with these fees and the waiver of patient co-pays and deductibles. As a result, the trustee maintained that each physician payment also constituted a fraudulent transfer under the Bankruptcy Code and sued to recover the payments. Similar allegations were also made by the trustee to recover payments under state fraudulent transfer laws. Continue Reading

Capitol Hill Healthcare Update

White House Eyes Panel on Drug Prices While Senators Call for Transparency

President Donald Trump is considering appointing lawmakers to a bipartisan commission that would develop strategies to lower prescription drug prices, while senators last week called for greater transparency into how medicines are priced. Trump has been sharply critical of the pharmaceutical industry, including as recently as last week when he repeated his remarks that drug companies are “getting away with murder.” The president is said to be frustrated that drug prices in the United States are higher than in other industrialized countries where governments set prices.

It is not clear whether a commission will be created or whether it would replace a potential Trump executive order on drug prices, which administration officials had focused on earlier this year. Work on that executive order has cooled in recent months. Industry officials oppose the idea of a commission, which would give their opponents on the Hill – mostly Democrats – a platform to advocate for anti-industry provisions. Democrats have long wanted to lift the ban on the U.S. Department of Health & Human Services (HHS) negotiating prices for Medicare Part D drugs and removing the ban on importation of drugs from other countries where governments set prices. Continue Reading

Structuring Clinical Practices to Prevent Pitfalls – Deeply Rooted Corporate Practice Doctrine Remains Strong

With growing patient demands, advanced technology and payer restraints, healthcare providers are increasingly exploring management agreements with experienced companies to handle the daily operations of their clinical practice. However, healthcare professionals need to be aware of the potential pitfalls in doing so, especially given the deeply rooted corporate practice of medicine doctrine in many states, which provides that practitioners, not corporations, should retain control of the business decisions that affect the practice of medicine. While the corporate practice of medicine is often thought of as an antiquated doctrine, the New York and New Jersey courts recently affirmed that the doctrine is indeed alive and well.

At its core, the corporate practice doctrine prohibits non-physician-owned business entities from engaging directly in clinical practice. States adopting the doctrine, whether through statutory law, common law or otherwise, commonly state that it ensures a clinician is responsible for the control and direction of a medical practice. Many states have adopted provisions that enable healthcare professionals to enter into arm’s length arrangements for services by non-physician entities. However, the medical professionals should have an integral role in the direction of their clinical practice at all times. Continue Reading

Florida Emergency Power Plan Rule Requires Nursing Homes and Assisted Living Facilities to Obtain Generators

The deadline is November 15, 2017

In response to the death of eight nursing home residents after a power failure in Hollywood, Florida during Hurricane Irma, Florida regulators recently issued emergency rules requiring the state’s nursing homes and assisted living facilities to have and maintain backup generators and alternate fuel for power emergencies. However, due to the current high demand for generators in Florida and other barriers to compliance, many nursing homes and assisted living facilities are finding it extremely difficult, if not impossible, to comply with the state’s emergency power plan rule by the November 15, 2017 deadline. Read More >>

Capitol Hill Healthcare Update

Democrats and Some Republicans Say Congress Must Restore Insurer Subsidies

President Trump’s announcement Friday that he would stop cost-sharing payments to insurance companies triggered a firestorm on Capitol Hill, with lawmakers in both parties calling on Congress to restore the funding quickly.

House Democratic Leader Nancy Pelosi (D-Calif.) said lawmakers could leverage upcoming must-pass budget bills to include the payments to insurers. Sen. Bill Cassidy (R-La.) and Rep. Leonard Lance (R-N.J.) were among some of the GOP lawmakers who said Congress should restore the payments as part of the appropriations process.

Republicans – including Trump – have long complained the payments are illegal because then-President Obama authorized them by executive order even though they were never sanctioned in the Affordable Care Act (ACA) statute. One federal court has held the payments as unconstitutional though that case is on appeal. Continue Reading

Five New Team Members Join BakerHostetler’s National Healthcare Practice

Partner Mark A. Kadzielski and Counsel Jeeyoung Kim have joined BakerHostetler in our Los Angeles office. Mark focuses his practice on representing hospitals, medical staffs, managed care enterprises and institutional and individual healthcare providers through government regulatory and licensing matters, peer review, joint commission accreditations, credentialing, compliance and corporate government oversight, and Medicare certification. Jeeyoung will work closely with Mark on these matters while also focusing on patient privacy and telemedicine.

Elizabeth Goldman has joined our team in the Washington, D.C. office. Elizabeth has a strong background of working with clients on complex Medicare reimbursement and coverage disputes, as well as many other healthcare regulatory and compliance issues. She will work with hospitals and health systems, medical staffs and other healthcare providers. Elizabeth will work closely with Lee Rosebush in our Washington, DC office.

Our Houston office also has two new healthcare team members. Kathryn Carey and Jessica Adams will be working closely with our established full-service Houston healthcare team. Kathryn focuses her practice on regulatory work for clients in the healthcare industry, with an emphasis on healthcare privacy and data security. Jessica focuses her developing practice on healthcare law, particularly on regulatory and compliance matters.

Capitol Hill Healthcare Update

CHIP Renewal Triggers Partisan Clash Over Offsets

Although the Children’s Health Insurance Program (CHIP) enjoys broad bipartisan support on Capitol Hill, lawmakers last week sharply disagreed over how to pay for its renewal – signaling that a final vote could be delayed for months.

The House Energy and Commerce Committee and the Senate Finance Committee last week approved separate versions of bills to renew federal CHIP funding. The Senate process has so far been bipartisan though committee Chairman Orrin Hatch (R-Utah) and the panel’s top Democrat, Sen. Ron Wyden (D-Ore.) have not spelled out how they would pay for their bill. Continue Reading