Capitol Hill Healthcare Update

CaphillGOP still adrift on ACA repeal-replace plans

Meeting privately with Senate Republicans to discuss next steps on the ACA was among the first actions taken last week by the new Secretary of the U.S. Department of Health and Human Services Tom Price. But GOP senators left the meeting disappointed that President Trump’s point man on healthcare didn’t offer a detailed plan on how to either repeal or replace the law.  Also last week, on the other side of the Capitol, House committee leaders held a closed-door meeting with restless rank-and-file Republicans. Energy and Commerce Committee Chairman Greg Walden (R-Ore.) and Ways and Means Committee Chairman Kevin Brady (R-Texas) sketched an outline for replacing the ACA, offered a menu of policy options to replace it, and distributed a 19-page issue backgrounder and talking points for GOP lawmakers.

But underscoring Republicans’ disunity over how to end a law they have singularly campaigned against for six years, several GOP lawmakers publicly dismissed the House outline to replace the ACA. Sen. Rand Paul (R-Ky.) called it “Obamacare lite.” Sen. Bill Cassidy (R-La.), himself a physician, said the House effort could leave more people uninsured than under the existing law. A separate proposal floated by Brady during the meeting – allowing Americans who lack insurance to buy coverage with refundable tax credits – drew fire from other conservatives who oppose tax credits that exceed what taxpayers owe to the IRS. Continue Reading

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Final Rule Expands OIG Exclusion Authority

On January 12, 2017, less than a week before the official transition from one administration to the next, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a rule finalizing changes to its most potent compliance tool: exclusion authority. The Affordable Care Act (ACA) significantly expanded the OIG’s permissive authority to impose exclusion, a bar on individuals’ and entities’ participation in federal healthcare programs. Despite moderating some initial interpretations of this considerable authority, the final rule broadens the OIG’s exclusion power.

Although the proposed rule envisioned no time limitation on fraudulent wrongdoing as a basis for exclusion, the final rule imposed a 10-year limitation, coordinating it with the federal False Claims Act. The OIG also significantly heightened the loss threshold to be met in order to consider a longer exclusion, from $5,000 to up to $50,000 in some cases. And from an initial proposal that excluded individuals with an ownership interest in excluded entities, even if they left prior to its exclusion, the OIG ultimately decided that exclusion would only apply to such an individual if they were still a part of the entity when it was excluded. The OIG even instituted a new early reinstatement process for excluded individuals who can prove they are no longer a threat to federal healthcare programs. On the other hand, none of these interpretations diminish the fact that the final rule achieves a clear expansion of the scope of the OIG’s permissive exclusion authority. The OIG may now consider exclusion for the obstruction of “audits,” which it does not define, rather than solely for the obstruction of investigations. It may also now consider exclusion for failure to disclose information related to indirect requests for or receipts of federal payments, versus a previous focus only on direct actions.

The fraud and abuse provisions, including exclusion authority, continue to be an effective enforcement tool of the OIG and other agencies tasked with oversight of federal healthcare programs. Hence, we remind our healthcare clients that compliance is an important aspect in responding to any oversight review.

Amendment 7 Stands Its Ground Against the Federal Patient Safety and Quality Improvement Act

Supreme Court of FloridaIt is well known in Florida that Article X, Section 25 of the Florida Constitution (Amendment 7) provides patients with access to any adverse medical incident report (even involving other patients) created by healthcare providers. This has been an ongoing issue for providers in the state, given that the Federal Patient Safety and Quality Improvement Act (PSQIA) establishes a work product privilege that would otherwise protect access to such reports. Understanding that the PSQIA will not offer the same protections in Florida as elsewhere is particularly critical for healthcare providers acquiring facilities in Florida or those doing business in the state. To that end, healthcare providers should consider seeking legal counsel to address how to properly protect this information in Florida. While Amendment 7 continues to be challenged in the courts it is still being strongly enforced by the state. As discussed below, the Florida Supreme Court recently held that the PSQIA was not created to be a shield for healthcare providers to prevent individuals’ access to information afforded under Amendment 7.

In Charles v. Southern Baptist Hosp. of Fla., Inc., No. SC15-2180, 2017 WL 411333 (Fla. Jan. 31, 2017), plaintiff Jean Charles, Jr. (Charles) initiated a medical malpractice action, as next friend and duly appointed guardian of his sister, Marie Charles, and her minor children. Charles requested from Southern Baptist Hospital of Florida (Hospital) documents related to adverse medical incidents in the Hospital’s history and any physician who worked for the Hospital or arising from care and treatment rendered by the Hospital during the three-year period preceding Marie Charles’ care and treatment through the time of the discovery request. The Hospital produced certain responsive documents including, but not limited to, Code 15 Reports, Annual Reports, and two occurrence reports specific to Marie Charles that were extracted from the Hospital’s patient safety evaluation system before they were reported to the patient safety organization (PSO). However, the Hospital participates in information sharing under the PSQIA and has an established patient safety evaluation system in which it collects, manages, and analyzes such information for reporting to the Hospital’s PSO. As a result, the Hospital (even though responsive) claimed the occurrence reports were not subject to production because they were privileged and confidential under the PSQIA as patient safety work product.

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Courts’ Consistent Application of Stevens to State Institutions of Higher Learning

supreme court iStock_000000865139_LargeThe United States Supreme Court recently declined review of the First Circuit Court of Appeals’ ruling that the University of Massachusetts Medical School was an “arm of the state,” and thus, not subject to the federal False Claims Act (FCA).  U.S. ex rel. Willette v. University of Massachusetts, Worchester, No. 15-1437 (2017).  In declining review, the Supreme Court impliedly acknowledged the “bedrock proposition” that states, including state agencies and state institutions of higher learning, cannot be sued in a private action under the FCA. U.S. ex rel. Willette v. Univ. of Massachusetts, Worchester, 812 F.3d 35 (1st Cir. 2016).

This bedrock proposition was delivered by the Supreme Court in its 2000 opinion in Vermont Agency of Natural Resources v. U.S. ex rel. Stevens, 529 U.S. 765 (2000).   Although the FCA subjects to liability “any person” who submits a false claim to the government “for payment or approval, the statute itself does not define the term ‘person.’” In Stevens, the Supreme Court filled this void and applied the “longstanding interpretive presumption” that “person” does not include the sovereign, including states and “arms of the states.” The ruling in Stevens has since been extended to state institutions of higher learning, and its consistent and continued application has been a significant deterrent to whistleblowers attempting to pursue alleged FCA actions against the states and, of particular importance, against state institutions of higher learning in the medical or healthcare fields.

Another recent example of Stevens’ consistent application was seen when the Western District of Kentucky dismissed an FCA lawsuit against the University of Louisville, the University of Louisville Research Foundation and several university officials.  Although the district court was sympathetic to the relators’ plea that “it would be unfair for the defendants to obtain federal grant money under false pretenses and then fire the plaintiffs for complaining about it, all without the fear of liability,” the court held true to Stevens’ precedent that the FCA does not apply to state agencies or individuals sued in their capacity as university officials.  U.S. ex rel. Brinkley v. Univ. of Louisville, No. 15-cv-180-DJH, 2017, 2017 WL 210244 (W.D. KY Jan. 17, 2017).

Capitol Hill Healthcare Update

CaphillAt HHS, Price will lead Trump’s efforts on ACA repeal

Three weeks into President Trump’s administration, the Senate on Friday narrowly approved Tom Price as Secretary of the U.S. Department of Health and Human Services (HHS), elevating the former orthopedic surgeon as Trump’s point person on repealing and replacing the Affordable Care Act (ACA). Price won Senate confirmation 52-47 after Democrats exhausted all procedural tools to block a vote. No Democrat voted to confirm Price.

Price’s installation is key to Republicans’ drive to repeal the healthcare law. Because much of the ACA was implemented through department regulation, Price will determine which provisions can be dialed back or wiped out altogether by withdrawing existing HHS regulations, promulgating new ones or simply not enforcing what’s already on the books. Continue Reading

Hold the Phone! The Joint Commission Reinstates Ban on Texting Orders

The Joint Commission (TJC) and the Centers for Medicare & Medicaid Services (CMS) took a firm stance against physicians texting patient orders in a recent joint statement, clarifying that it is not acceptable for physicians or licensed independent practitioners to text orders for patient care, treatment or services to hospitals or other healthcare providers. Instead, computerized provider order entry (CPOE) should be the preferred method for submitting orders, and in the event that a CPOE or written order cannot be submitted, a verbal order is acceptable.

The new guidance rescinds TJC’s May 2016 guidance, which permitted utilization of secure text messaging platforms, but was suspended a month later to permit TJC to collaborate with CMS. The results of this TJC/CMS collaboration were manifested in the December 2016 publication, in which TJC prohibits the use of secured text orders and promotes the use of CPOE instead.

TJC also said that all healthcare organizations should have policies prohibiting the use of unsecured text messaging for communicating protected health information. TJC and CMS strongly urged providers to utilize CPOE to ensure accuracy and allow direct order entry into the electronic health record. While permitting verbal orders, the guidance cautions that they should be used infrequently and only in instances when using CPOE is impossible or impracticable.

Capitol Hill Healthcare Update

Washington DC iStock_000074771283_FullGOP leaders delay ACA action amid “repeal,” “repair” debate

House Speaker Paul Ryan last week set a deadline of the end of March for repealing most of the Affordable Care Act (ACA), as other Republican leaders and conservative rank-and-file lawmakers advocated competing policy alternatives for what would follow the health law.

Congressional Republicans had hoped to fast-track ACA repeal by passing legislation repealing most of the law by early February. Although Congress last month authorized the use of filibuster-proof legislation known as budget reconciliation, the GOP has been hampered trying to determine which parts of the ACA can be repealed and what new parts can be included in the reconciliation bill.

Senate HELP Committee Chairman Lamar Alexander (R-Tenn.) continued to propose a methodical approach, saying during a committee hearing last week that he favored “repairing” the ACA and detailing what Republicans would do next before repealing the law. Continue Reading

Welcome to the Future: HHS Releases Final Rule to Modernize Protections for Clinical Trial Participants

Researcher at workThe Federal Policy for the Protection of Human Subjects, or the “Common Rule,” governs the ethical conduct of research involving human subjects and is funded through various federal agencies. On January 19, the U.S. Department of Health and Human Services in collaboration with 15 other federal agencies (the Agencies) issued a Final Rule to update the Common Rule. This update represents the most substantive update to the Common Rule since 1991 and follows the 2015 Notice of Proposed Rulemaking (NPRM). A detailed overview of stakeholder comments and concerns in response to the NPRM is available here and here. The majority of the Final Rule goes into effect January 19, 2018.

The changes to the Common Rule reflect the evolving nature of research and research settings over the past few decades. The Agencies noted that the evolution in technology has changed the scale, nature and integration of information collected, allowing researchers to collect and analyze data in ways that were unimaginable when the Common Rule was first adopted. The most significant changes to the Common Rule are addressed below. Continue Reading

More Time to Streamline: NIH Extends Deadline for Implementation of Single IRBs for Funded Studies

science iStock_000080822095_FullThe research community has a full plate as it sifts through the final rule on the Common Rule issued last week. Many are now fully appreciating the December gift from the National Institutes of Health that granted an extension for developing policies to streamline multi-site studies under a single Institutional Review Board (IRB).

On December 16, 2016, the NIH officially notified the public that it will delay implementation of its policy to require domestic NIH-funded multi-site studies to use one IRB of record for ethical reviews of all other sites in the study. Originally, the policy was set to apply to all applications submitted on or after May 25, 2017. Based on numerous concerns voiced by the research community, NIH delayed the implementation date four months. The policy is now effective for all applications received on or after September 25, 2017. Ongoing, non-competing awards are not expected to follow the policy until the grantee submits a competing renewal application after the policy is in effect. For contracts, the policy applies to all solicitations issued on or after the effective date.

NIH’s policy is akin to policies issued by the National Cancer Institute and other NIH programs. Citing its effort to streamline administrative processes and create more reporting efficiency, NIH believes that a single IRB will ensure that the same study administered at multiple sites will be conducted in a more uniform manner, including less variation with informed consent and other key IRB documents. Researchers will be required to coordinate and determine the best site to submit to NIH for the record. NIH has issued a robust set of frequently asked questions regarding the policy and its implementation. The changes to the implementation deadline did not result in any changes to the policy.