Health Care

Last week, a federal judge in North Carolina declined to preliminarily enjoin Novant Health, Inc.’s (“Novant”) acquisition of two hospitals from Community Health Systems, Inc. (“CHS”). The FTC filed suit in federal court and in its in-house administrative court in January, alleging that the transaction violated Section 7 of the Clayton Act in the market for inpatient general acute care services sold to commercial health plans and their members.  

Over ten years ago, individuals and businesses insured by health plans that contract with Sutter Health filed a class action lawsuit against Sutter Health alleging antitrust violations under federal and California laws. Sutter is a healthcare giant in Northern California, serving over 100 communities and 3 million people, and includes 24 hospitals, five medical foundations, and 40 ambulatory service centers.

As part of its 2025 Medicare Advantage and Part D Final Rule (the Final Rule), the Centers for Medicare & Medicaid Services (CMS) finalized a number of regulatory changes relating to how Medicare Advantage (MA) plans offer supplemental benefits and how they communicate such benefits to plan members. As previewed in the Proposed 2025 Rules, the Final Rule outlines CMS’s intentions to (i) more closely monitor the supplemental benefits that a Medicare Advantage organization (MAO) offers and categorizes as "Special Supplemental Benefits" for the Chronically Ill (SSBCI) and (ii) require MA plans to send annual notices to MA plan enrollees regarding their available supplemental benefits.

Acting U.S. Attorney Joshua Levy discussed the enforcement priorities for the Massachusetts U.S. Attorney’s Office (USAO) during a Q&A session on May 29, 2024, and made clear that the historical focus of the office remains the top priority: detecting and combating health care fraud, waste, and abuse. 

On April 18, 2024, the U.S. Department of Health and Human Services (HHS) Health Resources and Services Administration (HRSA) released a new Final Rule for its oft-criticized 340B Administrative Dispute Resolution (ADR) Program (2024 Final Rule).

On May 8, 2024, the U.S. House of Representatives Ways & Means Committee passed a bipartisan bill entitled the “Preserving Telehealth, Hospital and Ambulance Access Act” by a vote of 41-0, which will potentially have far-reaching consequences for Medicare beneficiaries, health care providers, and the telehealth and PBM industries.

Last month, the National Academies of Science, Engineering, and Medicine (“NASEM”) issued a report discussing the inclusion of pregnant and lactating people in clinical research and the health impacts of inadequate data from research involving this subpopulation. Titled “Advancing Clinical Research with Pregnant and Lactating Persons: Overcoming Real and Perceived Liability Risks,” the report came as a response to Congress calling upon NASEM to examine the real and perceived prevalence of legal liability resulting from including these research subjects in clinical trials. Overall, the report concluded that legal liability for including pregnant and lactating persons in research is very limited, but that perceptions of potential liability and a lack of explicit guidance for including this population safely have created real barriers to their inclusion.  In response, the report provides recommended actions for Congress, the Food and Drug Administration (“FDA”), the National Institutes of Health (“NIH”), and the Office of Human Research Protections (“OHRP”) to take to enhance the inclusion of this population in clinical trials, thereby enhancing data around the safety and efficacy of approved drug products for pregnant and lactating persons.  Study sponsors and institutions conducting research should continue to monitor developments in this area, including guidance from FDA.

The Food and Drug Administration (FDA) published its final rule on laboratory developed tests (LDTs) in the Federal Register on May 6, marking a watershed moment in the agency’s arduous decade-plus-long journey toward winding down its historical enforcement discretion posture for LDTs. But FDA’s crusade is far from over. It will have much to do to implement the four-year phase-out period described in the final rule and those efforts may be delayed by litigation seeking to enjoin implementation of the rule altogether. While we wait for the litigation shoe to drop, let’s take a look at what the final rule says and the changes FDA made in these highly significant policy decisions since the Notice of Proposed Rulemaking was published on October 3, 2023 (see our previous posts on the NPRM here and here).

Mintz is pleased to present its quarterly publication, PBM Policy and Legislative Update. This edition builds upon prior issues and summarizes activity from October through December 2023 that affects the PBM industry and will specifically highlight (i) federal legislative and enforcement updates, (ii) state legislative updates and litigation, (iii) other industry news, and (iv) Inflation Reduction Act (IRA) updates.

As part of its 2025 Medicare Advantage and Part D Final Rule (the Final Rule), the Centers for Medicare & Medicaid Services (CMS) made a number of enrollment changes impacting dual eligible special needs plans (DSNPs). The goal of these changes is to promote integration of Medicaid and Medicare services for full benefit dually eligible (FBDE) individuals. While stakeholders support the overall goal of better integration, the new policies are complex and may discourage Medicare Advantage Organizations (MAOs) from participating in Medicaid managed care programs in certain regions. They also highlight how a federal DSNP regulation that is tied to how a state contracts with entities that offer Medicaid benefits can result in different impacts in different states.

Preventing discrimination and bias in connection with the use of artificial intelligence (AI) in health care is among the principal current focuses of U.S. Department of Health and Human Services (HHS) and was among the health care directives in the recent Biden Administration Executive Order on Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (Executive Order). Consistent with these priorities, on April 26, 2024, the HHS Office for Civil Rights (OCR) and the Centers for Medicare & Medicaid Services (CMS) released an unpublished version of a new final rule under Section 1557 of the Affordable Care Act (ACA) that aims to broadly address inequity across health care but also requires certain actions of entities covered under Section 1557 around their use of AI in clinical decision-making (Final Rule).

Earlier this week, the Biden-Harris Administration, through the Office for Civil Rights (OCR) announced a Final Rule aimed at protecting protected health information (PHI) related to lawfully provided reproductive health care services.  As we discussed last year, the HIPAA Privacy Rule to Support Reproductive Health Care Privacy was proposed in response to concerns about the confidentiality of PHI related to reproductive health care following the decision in Dobbs v. Jackson Women’s Health Organization.  In the executive summary of the Final Rule, OCR emphasized that the changing post-Dobbs legal landscape “increases the likelihood that an individual’s PHI may be disclosed in ways that cause harm to the interests that HIPAA seeks to protect, including the trust of individuals in health care providers and the health care system.”  The Final Rule defines “reproductive health care” as “health care…that affects the health of an individual in all matters relating to the reproductive system and to its functions and processes.” 

On April 23, 2024, the Centers for Medicare & Medicaid Services (CMS) published final rules setting forth Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Program for Contract Year 2024--Remaining Provisions and Contract Year 2025 Policy and Technical Changes to the Medicare Advantage Program…et al. These sweeping final rules finalized many changes that were introduced in the Proposed 2025 Rules and other changes that were proposed in the Proposed 2024 Rules. The rules will implement changes related to many areas, including, for example, Star Ratings, marketing and communications standards and requirements, agent/broker compensation, health equity, dual eligible special needs plans (D-SNPs), Part D formularies, utilization management, and the Medicare Advantage and Part D application process.

The government’s continued dedication of resources to investigating and prosecuting fraud against COVID-19 pandemic relief programs appears to have borne fruit according to the results of the COVID-19 Fraud Enforcement Task Force’s (CFETF) report released on April 9, 2024. The CFETF, which represents a concerted effort across numerous federal agencies to investigate pandemic-related fraud, has, according to its 2024 report, succeeded in prosecuting over 3,500 defendants in criminal enforcement matters, in bringing civil enforcement actions resulting in more than 400 civil settlements and judgments, and in securing more than $1.4 billion in seizures and forfeitures. The report itself is a showcase of the CFETF’s COVID-19 fraud enforcement efforts to date.

As promised in the U.S. Department of Health and Human Services (HHS) concept paper in December 2023, the agency published voluntary health care and public health cybersecurity performance goals (HPH CPGs) in January 2024 and then proposed in the HHS FY 2025 Budget to establish certain HPH CPG compliance incentives and penalties for hospitals.

In vitro diagnostics, or IVDs, have a somewhat unique position among the gamut of products that the Food and Drug Administration (FDA) oversees and regulates on behalf of the U.S. public. IVDs are classified as medical devices and include “reagents, instruments, and systems intended for use in diagnosis, including determining the state of health, through the collection, preparation, and examination of specimens taken from the human body.” Unlike human drug and non-IVD device products, which generally must be authorized for a specific medical use prior to commercialization, IVD products may be sold for certain scientific research studies without FDA authorization, but such IVD products may not be sold for clinical diagnostic use. 

Join Mintz Corporate and Securities Associate, Jason Miller, in a conversation with Margaret Yu, founder and CEO of Reliacare, and Andrew Gladue, founder and CEO of Plethys.

On March 18, President Biden signed an executive order (EO) that contributes to the administration’s objective to create solutions to long-lasting women’s health issues that have been historically understudied and under-evaluated.