Health Care

Pharmaceutical and medical device manufacturers should be advised that the government is using its enforcement authority under the Open Payments Program (otherwise known as the Sunshine Act) in conjunction with the Anti-Kickback Statute (AKS) against manufacturers for alleged kickbacks paid to referring physicians. On May 19, 2021, the Department of Justice (DOJ) announced its second publicly-available settlement involving alleged violations of the Open Payments Program, following on the heels of the DOJ’s first publicly-available Open Payments Program settlement back in October 2020.

The allegations for both settlements are very similar; manufacturers allegedly paid referring physicians in the form of meals, travel expense, and entertainment to induce them to use the manufacturers’ medical devices. Working in partnership with the Centers for Medicare & Medicaid Services (CMS), the DOJ asserted not only that the entertainment expenses were kickbacks in violation of the AKS, but also that the manufacturers failed to report to CMS the entertainment expenses as payments to the physicians in violation of the Open Payments Program.

On May 3, 2021, the California Senate Health Committee approved SB-642 “Health care: facilities: medical privileges.” The bill is currently pending in the California Senate. AB-705, which is substantially similar to SB-642, is also pending in the California Assembly. If passed, the law will curtail hospital governing bodies’ ability to make decisions about the medical services provided at the facility without medical staff approval, impose new limitations on arrangements between management services organizations and professional corporations, and add additional factors to the Attorney General’s review and approval of nonprofit health care facility transactions.

On May 17, 2021, the Biden Administration took its first major action impacting the 340B Drug Discount Program.  In a forceful statement, the Administration made plain its views on a major controversy that has pitted drug manufacturers against 340B covered entities for the past year - proclaiming that drug manufacturers are violating the 340B statute by restricting covered entity access to 340B discounts for drugs dispensed through 340B contract pharmacies. 

On April 22, 2021, Reps. G.K. Butterfield (D-NC) and David McKinley (R-WV) introduced H.R. 2759, or the Pharmacy and Medically Underserved Areas Enhancement Act. Its introduction marks a fourth bipartisan effort in the House to enact the legislation, which would allow Medicare to directly reimburse pharmacists for delivering certain health care services to Medicare beneficiaries living in areas with limited access to primary medical care. Hindsight suggests that when introduced in the past, the Act may not have been ripe for consideration. But now, in the wake of the COVID-19 pandemic and on the heels of successful initiatives like the West Virginia vaccine rollout, Congress may not wish to table discussion of the legislation any longer.

On April 28, the Massachusetts Public Health Council (“PHC”) approved final proposed amendments to the clinic licensure regulations. The amended regulations include changes related to serious reportable events, mobile sites, mental health and substance use disorder services, among other updates. The final regulations, which we've summarized here, are expected to be published in the May 14, 2021 Massachusetts Register.

On April 28, 2021, President Biden gave his first address to Congress and announced the American Families Plan (AFP). The AFP follows the 1.9 trillion-dollar stimulus, the American Rescue Plan Act, signed into law on March 11, 2021. Notably, in his speech, President Biden called upon Congress to pass drug pricing legislation; however, the current White House Fact Sheet on the AFP does not include specific drug pricing provisions. This blog post discusses the health-related portions of the AFP and provides an overview of the Lower Drug Costs Now Act which seeks to lower prescription drug prices.

The Food and Drug Administration (FDA) and the National Institutes of Health (NIH) have the authority to regulate clinical trial reporting requirements. Despite this authority, FDA and NIH have scantly enforced this area since the requirements were created by Congress in 2007, hindering the clinical trial transparency promised to the public. However, there may be a shift in the lackadaisical enforcement over such reporting. On April 28, 2021, Acting FDA Commissioner Janet Woodcock, M.D., announced that that the agency had sent more than 40 pre-notices to sponsors of clinical trials for failing to submit required clinical trial results to ClinicalTrials.gov. Notably, a Notice of Noncompliance was issued for the first time.

One main principle among public health measures is to use the least restrictive method necessary to protect the population, or to do the greatest good. From the public health perspective, requiring COVID status credentials (“Credentials”) makes sense because it allows people who present a low risk to others to not be subject to unnecessary restrictions. However, implementation and use of Credentials will require careful consideration of individual privacy concerns, as well as the ethical questions related to access and additional privilege.

The U.S. Food and Drug Administration (FDA), industry, policymakers, and consumers share a common goal of ensuring that the foods and beverages Americans eat and drink are safe, and the law has long prohibited the adulteration of a food that “contains any poisonous or deleterious substance which may render it injurious to health.” As science and technology advance, so too does our collective understanding of what that famous statutory phrase from the Food, Drug, and Cosmetic Act should mean. Accordingly, FDA’s mission in overseeing the safety of the food supply is constantly subject to change. One excellent example of that is playing out in real time, because due to enhanced methods of detecting toxic elements in food, consumer interest groups and Congress have raised questions about FDA’s apparent lack of interest in looking for potential contaminants in our foods (even as available data show that the levels of some metals, like lead, have been in a general decline in the food supply as manufacturing also becomes more sophisticated and controlled and industry invests in better detection methods in the advancement of the shared goal of food safety).

In its first exercise of a newly granted authority, the Federal Trade Commission (FTC or the Commission) on April 15, 2021 charged a St. Louis-based chiropractor and his company (the Defendants) with violating the COVID-19 Consumer Protection Act (the COVID-19 Act) and the Federal Trade Commission Act (FTC Act).  The Commission’s allegations focus on the deceptive marketing of products containing Vitamin D and Zinc as being scientifically proven to treat or prevent COVID-19 and as being equally as effective as or more effective than currently available COVID-19 vaccines.

On April 16, 2021, Food and Drug Administration (FDA) published twin notices in the Federal Register effectively reversing a move by the Trump administration Department of Health and Human Services (HHS) on January 15, 2021 purporting to exempt 91 medical device types from the premarket notification requirement under Section 510(k) of the Federal Food, Drug, and Cosmetic Act. HHS’s actions on January 15, signed by then-HHS Secretary Alex Azar, sought to make permanent FDA’s grant of temporary enforcement discretion for the 91 device types for the duration of the COVID-19 public health emergency.

The Federal Communications Commission (FCC) released a Public Notice announcing that the application filing window for Round 2 of its COVID-19 Telehealth Program will run for seven days starting April 29, 2021. The application portal will open at noon ET on Thursday, April 29, and close one week later at noon ET on Thursday, May 6. Round 2 of the FCC's COVID-19 Telehealth Program will make an additional almost $250 million available to fund telehealth and connected care services provided by eligible providers during the ongoing COVID-19 pandemic.

As we previously reported, President Biden signed into law a $1.9 trillion dollar stimulus bill, the American Rescue Plan Act (ARPA). This historic legislative package provides much needed relief to millions of Americans impacted by the COVID-19 pandemic and essential resources to address the ongoing public health emergency. Among other things, the ARPA allocates funds to the Department of Health and Human Services (HHS) for COVID-19 testing, contract tracing, vaccines, supplies, and other related treatment. To alleviate the strain of the COVID-19 pandemic on America’s public health care system, it includes funding for rural health providers, community health centers, and skilled nursing facilities, and makes important modifications to the Medicare and Medicaid programs. This post summarizes the Medicaid provisions contained in the ARPA and their proposed changes to the Medicaid program.

In an unexpected twist to a troubling situation that began over two years ago, U.S. Special Counsel Henry Kerner penned a letter to President Biden on March 31, 2021 questioning the Food and Drug Administration’s (FDA’s) handling of a whistleblower case that alleged improprieties surrounding compliance inspections of vaccine manufacturing facilities. Special Counsel Kerner’s letter to the President coincided with his closing of the investigation and his conclusion that the agency’s actions met “all the statutory requirements” but that they nonetheless “do not appear reasonable.” What the new leadership at the FDA’s parent Department of Health and Human Services or within Congress may do with these findings remains to be seen and certainly bears watching in the coming weeks and months. The March 31 letter was also provided to the Democratic Chairs and the ranking Republicans on the Senate Health Committee and the House Energy & Commerce Committee, which oversee FDA operations, increasing the likelihood of additional investigation and potentially public hearings, especially with congressional reauthorization of the various user fee programs looming as a must-pass action for 2022.

On March 29, 2021, the Federal Communications Commission (“FCC” or “Commission”) adopted an Order establishing rules and procedures for Round 2 of the COVID-19 Telehealth Program (the “Program”) to continue supporting telehealth services, which have proved to be so vital during the COVID-19 pandemic. In a News Release accompanying the Order, FCC Acting Chairwoman Jessica Rosenworcel highlighted that “[t]his past year has proven, without a doubt, that telehealth technology is critical to helping address inequities in access to health care services” and that Round 2 of this program will help address these challenges “head on.”

On Friday, March 26, 2021, the Department of Justice (DOJ) announced an update on its efforts to combat COVID-19 related fraud.  Since Congress first responded to the coronavirus pandemic by passing $2.2 trillion in relief through the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, DOJ has pursued civil and criminal actions primarily targeting (1) fraudulent COVID-19 related tests or treatments, and (2) abuse of the CARES Act’s popular Paycheck Protection Program (PPP).  Friday’s announcement revealed that DOJ is also ramping up its efforts to prosecute fraud on the CARES Act’s Economic Injury Disaster Loan (EIDL) and Unemployment Insurance (UI) initiatives. 

Over the past year the telehealth landscape has been a patchwork of temporary waivers and regulations, expanding access during the COVID-19 pandemic but leaving providers and patients uncertain about whether the positive coverage and reimbursement changes and relaxation of pre-pandemic restrictions would continue in the future. In recent weeks, we have seen a number of state actions making permanent changes to expand access to telehealth. These changes suggest a positive trend towards making telehealth an integral part of the care delivery system, although the complicated regulatory frameworks still present challenges to providers seeking to treat patients via telehealth.

On February 24, 2021, DOJ’s Criminal Division Fraud Section published its annual year-end summary. The Fraud Section focuses on prosecuting white-collar crime. The report summarizes enforcement activity in the past year and discusses notable cases from the Fraud Section’s three litigation units: (1) the Health Care Fraud (HCF) Unit; (2) the Foreign Corrupt Practices Act (FCPA) Unit; and (3) the Market Integrity and Major Frauds (MIMF) Unit. In summarizing the Fraud Section’s main achievements from 2020, the report also provides valuable insights on what lies ahead for the Fraud Section in 2021. This post focuses on the health care enforcement portion of the Fraud Section’s report.

Last week, Geisinger Health (“Geisinger”) and Evangelical Community Hospital (“Evangelical”) reached a settlement agreement with the Department of Justice (“DOJ”), resolving the DOJ’s ongoing litigation challenging Geisinger’s partial acquisition of Evangelical. Notably, the settlement agreement, among other terms, limits Geisinger’s ownership interest in Evangelical to a 7.5% passive investment and prevents Geisinger from exercising any control or influence over Evangelical.

On March 3, 2021, FDA issued a statement acknowledging that certain entities produce certificates of registration for medical device manufacturers and clarifying that the agency does not issue such certificates. The agency also announced that it sent letters to 25 entities demanding that they stop producing these false and misleading certificates because some device manufacturers and distributors are using them to claim that the devices they produce or sell are cleared, approved, or otherwise authorized by FDA.