Capitol Hill Healthcare Update

Senate Presses Ahead on Healthcare Talks as Deadline Looms

With only 10 legislative days before Senate Republicans’ self-imposed deadline, GOP lawmakers face growing obstacles in their quest to vote on replacing the Affordable Care Act (ACA) before the beginning of their scheduled Fourth of July recess.

Still, Majority Leader Mitch McConnell (R-Ky.) wants a vote by June 30, in part to clear the chamber’s calendar for other pressing issues this summer, including a fiscal 2018 budget blueprint, legislation to fund the government, and reauthorizing FDA user fees and the children’s health insurance program (CHIP).

Some conservative senators are voicing concern that Sen. McConnell may not be doing enough to curb Medicaid spending in the 31 expansion states. They point to the possibility that the ACA’s Medicaid expansion might last beyond the 2020 cutoff in the House bill as a sign moderate lawmakers are gaining the upper hand as McConnell tries to cobble together 50 votes for an overall package.

But moderate senators worry, too, that conservatives may pick up support for lowering the amount that Washington contributes to state Medicaid programs.

Not content to sit on the sidelines, Democrats are increasingly criticizing Republicans for crafting their bill behind closed doors with no public hearings or input from committees with jurisdiction over healthcare policy (even some rank-and-file GOP senators are voicing the same concern). Democrats this week may try to gum up the Senate with procedural objections in an effort draw attention to their concerns. Continue Reading

Branded Biologic Products Lose 180 Days of Patent Exclusivity in Unanimous Decision From Supreme Court

On June 13, 2017, the U.S. Supreme Court issued its opinion in Sandoz v. Amgen. In doing so, it answered two questions raised under the Biologics Price Competition and Innovation Act of 2009 (BPCI). First, is an injunction available under federal law if the biosimilar applicant fails to provide its application and manufacturing information to the manufacturer of the biologic? Second, when does the 180-day notice requirement begin? Both of these questions have serious ramifications for manufacturers, providers and payers moving forward.


BPCI is the biological product counterpart to the Hatch-Waxman Act, which governs the generic drug approval process. BPCI enacted 42 U.S.C., § 262, which governs the biosimilar approval process. Biosimilar biological products that are designated as interchangeable are analogous to generic medications. When a drug is prescribed, a generic is commonly dispensed when available. Generics are usually more cost-effective than brand-name medications. However, as of June 1, 2017, there are only a handful of FDA-approved biosimilar products.

Under BPCI, a biosimilar is defined as a biological product that is “highly similar to the reference product” and has “no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity, and potency of the product.” 42 U.S.C. § 262(i)(2)(A)-(B). However, it should be noted that for payers and providers, there is a difference between a biosimilar and an interchangeable product from a substitution perspective. Specifically, only if the biosimilar is found to be interchangeable, based on the submitted application and testing requirements, may the biosimilar be substituted for the reference product without the intervention of the prescribing healthcare practitioner. Continue Reading

Capitol Hill Healthcare Update

Senate GOP Still Talking on Health Bill as Clock Ticks

Senate Republicans continue intra-party discussions on changes to House-passed legislation replacing the Affordable Care Act (ACA), but the lack of consensus is threatening GOP leaders’ pledge to have a bill ready for a vote this month.

Led by Senate Majority Leader Mitch McConnell, key Republican senators held a series of meetings last week to gauge policy options. While the discussions were said to have narrowed some differences, senior staff said senators are not close to resolving the thorny issues that have divided conservative and moderate lawmakers.

The House bill phased out the ACA’s Medicaid expansion after 2020, but Republican senators representing states that added to their Medicaid programs – including Sens. Rob Portman (R-Ohio), Dean Heller (R-Nev.) and Shelly Moore Capito (R-W.Va.) – want to extend it for several more years. A potential solution might be to lengthen the wind-down beyond 2020 but not reduce funding under the per capita cap model as some conservative senators have separately advocated. Continue Reading

Webinar: Medical Device Connectivity: HIPAA, FDA and IP Considerations

Blue cardiogramPlease join us for this complimentary CLE webinar on Wednesday, June 14, 2017, from 2 -3:30 p.m. EDT

With increasing healthcare costs and the transition to value-based reimbursement, never has the need for connected medical devices been so great – and never have the pitfalls been so daunting. Join us for an overview of the regulatory and intellectual property landscape for this groundbreaking technology.

Our speakers will summarize developments in compliance and security issues, FDA guidelines for premarket and postmarket management of cybersecurity, as well as FDA rules regarding software for medical devices and software as a medical device (SaMD).

In addition, we will cover IP considerations such as claim drafting strategies, design patents for GUIs and recommendations for layered protection of patient monitoring inventions.


Hussein Akhavannik focuses his practice on portfolio management, patent prosecution and IP due diligence. He prosecutes patent applications in technologies related to the electrical, computer, medical and mechanical arts. Hussein spent almost four years at the U.S. Patent and Trademark Office as a patent examiner and as a legal intern for the Patent Trial and Appeal Board and the Office of the Solicitor.

With a background as a defense, regulatory, and registered patent attorney who has also worked as a registered pharmacist, Lee Rosebush provides his clients with legal counsel that is grounded in first-hand experience. Lee is frequently sought out to help expedite corporate deals involving healthcare entities.

CLE Information:

1.5 hrs. of CLE credit is approved for CA and NY and also CO and NJ via reciprocity. Credit has been requested in the following states: FL, GA, IL, MN, OH, TN, TX and VA.

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Capitol Hill Healthcare Update

Senate Leaders to Outline ACA Policy Options to GOP Lawmakers

Senate Republicans return to Washington this week after a 10-day recess facing a key inflection point in their effort to repeal and replace the Affordable Care Act (ACA) as GOP leaders will outline policy options they hope can unify their fragmented caucus.

None of the options is a silver bullet, and each effort to appeal to one group of Republicans risks triggering new opposition from another. Majority Leader Mitch McConnell faces the seemingly herculean task of fashioning legislation that can satisfy at least 50 senators, allowing Vice President Pence to cast the tie-breaking vote to pass a repeal-and-replace bill. McConnell’s margin for error is narrow as Republicans hold 52 Senate seats.

Among the policy choices Republicans will begin weighing this week is postponing ACA repeal until 2020 to allow Congress additional time to draft an overhaul of the law. Under that plan, the Senate would provide additional subsidies to try to stabilize individual insurance premiums and to incentivize insurers to return to states they’ve abandoned. Most Republicans would likely view punting for two years as a viable alternative only to doing nothing. Continue Reading

Specificity Sometimes Key; Sometimes Not

Close-up image of contract form on a deskTime spent drafting and negotiating an agreement often pays dividends in assuring that each party gets the benefits they desire through the agreement and incurs obligations no greater than they intended. Two recent cases, discussed below, demonstrate how small drafting oversights resulted in significant litigation costs to the parties and in one case, the party’s loss of the prime benefit they sought from the arrangement.

Arbitration Agreements Signed Under a Power of Attorney

Beverly Wellner and Janis Clark (POA holders) each held a power of attorney (POA) affording her broad authority to manage her family members, Joe Wellner and Olive Clark, respectively. When Wellner and Clark were admitted to a nursing home, the documents to admit them included an agreement to arbitrate any and all claims or controversies arising out of or in any way relating to their stay at the facility. The POA holders signed the arbitration agreements. After Joe and Olive died, their estates sued the nursing home alleging that their deaths were caused by the facility’s negligence. Continue Reading

The DOJ Enters Another FCA Lawsuit Against UnitedHealth

whistleblowerThe U.S. Department of Justice (DOJ) recently filed its complaint in intervention in another whistleblower lawsuit brought under the False Claims Act against the nation’s largest owner and operator of Medicare Advantage (MA) organizations, UnitedHealth Group, Inc. (United). The DOJ’s 39-page complaint alleges that United had fraudulently obtained inflated risk adjustment payments by over reporting diagnosis codes for MA beneficiaries since 2005. At the heart of the complaint is the allegation that United “systematically ignored information” in blind audits that revealed both under reporting (i.e., diagnoses that the providers did not report) and over reporting (i.e., invalid diagnoses not supported by medical records). The complaint alleges that by failing to “look both ways,” United “improperly generated and reported skewed data artificially inflating beneficiaries’ risk scores, avoided negative payment adjustments and retained payments to which it was not entitled.” Continue Reading

Defending Competitive Harm with Efficiencies: A Fire Swamp of Trouble

gavelThe use of efficiencies as a defense remains without a firm footing in law when a transaction has demonstrable and substantial anticompetitive effects.

In Rob Reiner’s classic fantasy adventure The Princess Bride, Princess Buttercup and her true love, Westley, stand at the edge of the notoriously deadly Fire Swamp, chased there by enemies and with only that path forward. “We’ll never survive,” Princess Buttercup darkly intones. “Nonsense,” Westley responds cheerfully, “you’re only saying that because no one ever has.” As recently illustrated by the unsuccessful attempt to join two of the nation’s largest healthcare insurers, pursuing an efficiencies defense against anticompetitive findings regarding a healthcare merger presents every bit as daunting a task and as discouraging a track record. Continue Reading

No More Tears: A Few Recommended Steps in Response to WannaCry Ransomware

Hacker wearing black glove clicking on ransomware buttonThe attack resulted in some hospitals canceling operations and appointments because critical patient data could not be accessed.

On May 12, 2017, thousands of companies across the globe saw the first signs of a prolific malware outbreak. The malware, a ransomware variant labeled WannaCry, is capable of encrypting files on a device and moving laterally to encrypt files on associated file shares. On average, the ransom amount that is demanded is the equivalent of $300 in bitcoin. Early reports indicate the ransomware, which may function in 27 different languages, encrypted data on more than 75,000 systems in 99 countries. Russia, Ukraine, India and Taiwan appear to have been the hardest hit. The attack resulted in some hospitals canceling operations and appointments because critical patient data could not be accessed. Continue Reading

Capitol Hill Healthcare Update

CBO Score of House Health Bill Set for This Week

Congress’s official budget scorekeepers this week will release analysis of the House-approved bill repealing most of the Affordable Care Act (ACA), and that data will inform Senate Republicans on a path for passing their version of the legislation.

The Congressional Budget Office (CBO) and the Joint Tax Committee on Wednesday are scheduled to release analysis – known on Capitol Hill as a “score” – of the House bill, including how much the bill reduces government spending and revised projections of how many Americans could lose insurance coverage.

Under Senate budget rules, that chamber’s bill must reduce spending by at least as much as the House’s bill. That may create complications for senators who want to provide more generous tax subsidies for people who buy insurance or if the lawmakers want to keep the ACA’s Medicaid expansion. Senate Republicans could get around increases in spending by phasing in changes or delaying the repeal of some of the ACA provider taxes and fees – though each of those decisions would provoke other political complications. Continue Reading