Health Care

Read about the plaintiffs’ claims in legal challenges to the IRA’s Medicare Drug Price Negotiation Program, including on constitutional grounds and administrative rulemaking doctrines, as well as the government’s response.

Read about the Inflation Reduction Act’s Medicare Drug Price Negotiation Program, how CMS selected the first 10 drugs included in the program, and implications for manufacturers.

Read about the Medicare Prescription Drug Inflation Rebate Program for Medicare Part D and Part B drugs and the Medicare Prescription Payment Plan Program.

Mintz’s PBM & Pharmacy practice is proud to present the Mintz IRA Update, a regular publication that delves into the spectrum of developments under the Inflation Reduction Act of 2022 (“IRA”) impacting the health care industry.

On August 21, 2023, the New York State Office of the Medicaid Inspector General (OMIG) issued updated guidance regarding its Self-Disclosure Program (Updated Guidance). In the final days of 2022, New York’s Department of Social Services adopted revised regulations that set forth the requirements for participation in OMIG’s Self-Disclosure Program, as well as regulations regarding Medicaid fraud, waste, and abuse prevention, and Medicaid compliance programs. Since the enactment of these regulations, OMIG has promulgated several guidance documents, including in January 2023, when it first published guidance (Original Guidance) regarding the Self-Disclosure Program. In the Updated Guidance, which replaced the Original Guidance, OMIG announced its new Abbreviated Self-Disclosure Process (ASDP).

Most of the recent focus around the implementation of the Inflation Reduction Act (IRA) by the press and the industry has been on the Medicare Drug Price Negotiation Program and its potential impact on manufacturers. But the Centers for Medicare & Medicaid Services (CMS) has been regularly releasing guidance regarding IRA-related changes that Part D plan sponsors had to implement for 2023 and in future years. CMS recently released guidance (Part One Guidance) on the Maximum Monthly Cap on Cost-Sharing Payments Program or the Medicare Prescription Payment Plan Program (previously referred to as the “OOP Smoothing Program”). The Medicare Prescription Payment Plan Program (the Program) will require Part D plans (PDPs) to make significant operational and system changes to meet its requirements. Many questions remain regarding the Program.

On August 15, 2023, the Office of Inspector General for the Department of Health and Human Services (OIG) issued a negative Advisory Opinion regarding a turnkey physician-owned entity (Newco) operated by an existing provider of intraoperative neuromonitoring (IONM) services. In reaching its determination, the OIG stated that Newco and its arrangements with the IONM Company would present a significant risk under the federal Anti-Kickback Statute (AKS) primarily because it exhibits many indicia of a suspect contractual joint venture.

On August 7, 2023, the Food and Drug Administration (FDA) published Draft Guidance for Industry: Registration and Listing of Cosmetic Product Facilities and Products (the Draft Guidance), which provides much-needed clarifications to the registration and listing requirements that will soon apply to cosmetics companies under the Modernization of Cosmetics Regulation Act (MoCRA), for review and public comment. MoCRA was signed into law in December 2022 (see our prior post here) and added significant new provisions on cosmetic products to the Federal Food, Drug, and Cosmetic Act (FD&C Act). Under Section 607 of the amended FD&C Act, facilities that manufacture or process a cosmetic product for distribution in the United States must register with FDA and submit a cosmetic product listing, and the Draft Guidance answers basic and essential questions about who must register and list, what information must be included, and how to submit information to FDA. This post summarizes key takeaways from the Draft Guidance and discusses its implications as the December 29, 2023 initial registration and listing deadline approaches.

The Centers for Medicare & Medicaid Services (CMS) announced a new primary care model—the Making Care Primary (MCP) Model—geared towards smaller, independent primary care practices and organizations that want to participate independently in value-based care initiatives. The MCP Model will be tested in eight states - Colorado, Massachusetts, Minnesota, New Mexico, New Jersey, New York, North Carolina, and Washington.

Many health care entities with assets or operations in California will face advance regulatory review of transactions by the state’s new Office of Health Care Affordability early next year. Mintz Members Lara Compton, Daniel Cody, and Kathryn Edgerton discuss the emergency rulemaking process, proposed regulations requiring pre-closing notice of deals, and key considerations for health organizations.

Health care providers furnishing dementia care should take note of a new payment model announced by the Centers for Medicare & Medicaid Services on July 31, 2023, called Guiding an Improved Dementia Experience (GUIDE). GUIDE is designed to improve dementia care, reduce strain on unpaid caregivers, and help people with dementia remain in their homes and communities. Providers participating in GUIDE receive monthly per-beneficiary per-month payments, can bill for respite care services, and are eligible for one-time payments to support infrastructure.

A little over a year after the Dobbs v. Jackson Women’s Health Organization decision, the Food and Drug Administration (FDA) continues to be at the forefront of addressing reproductive health concerns. An example of this activity came just a few days after the FDA approved the first nonprescription daily oral contraceptive for marketing in the U.S. when the agency sent a warning letter to Wise Women’s Choice (WISE) in connection with the marketing and sale of its “birth control cream.” Among other things, this warning letter highlights for consumers the importance of confirming that birth control methods are safe, effective, and FDA-approved for their intended uses.

As we previously reported, Perrigo Company’s subsidiary HRA Pharma submitted an application to the Food and Drug Administration (FDA) in the summer of 2022 to switch an existing prescription-only progestin birth control pill to over-the-counter (OTC) status. On July 13, 2023, FDA approved the application, based in part on a unanimous advisory committee vote in May that the potential benefits of nonprescription norgestrel daily tablet contraception availability outweighed its potential risks. OTC marketing of the pill will proceed without any innovative regulatory controls or requirements that could have added burdens on consumers’ ability to access the drug at the point of sale. In other words, the agency determined that the Drug Facts Label (DFL), enclosed package leaflet, and other information on the carton (i.e., the Principal Display Panel) provided sufficient mitigation measures for known risks associated with the drug.

Covered entities, business associates, and any entities that collect health information about consumers online should carefully review the latest joint letter from the Office for Civil Rights (OCR) and the   Federal Trade Commission (FTC). On July 20, 2023, the agencies sent a joint letter to approximately 130 hospital systems and telehealth providers warning them about “serious privacy and security risks related to the use of online tracking technologies” such ad Google Analytics and Meta/Facebook Pixel. That letter was subsequently shared publicly and should be reviewed by any entity subject to regulation by either agency.   

Since the federal No Surprises Act took effect in January 2022, many pieces of legislation have been, and continue to be, geared toward promoting price transparency in health care. One such example is seen in the momentum of state legislative activity surrounding the billing of facility fees. These fees are typically charged to cover the overhead costs associated with the operation of a health care facility, such as payment of staff, maintenance of the facilities, and administrative costs. Patients, however, are often unaware that such costs will be factored into their medical bills. In response, New York and Connecticut, among other states, have recently enacted and expanded laws regulating facility fee billing.

The Federal Trade Commission’s (FTC) recent press release marks a continuation in government action against manufacturers of products infused with delta-8 tetrahydrocannabinol (delta-8).  In May 2022, the U.S. Food and Drug Administration (FDA) issued warning letters to companies advertising delta-8 products as treatments for various medical conditions (see our prior post here).  The more recent action came on July 3, 2023, when the FTC and FDA announced that they had jointly issued warning letters to manufacturers marketing products infused with delta-8 that appear similar to Cheetos, Doritos, Nerds, and other snacks and treats popular with children.

Do the qui tam provisions of the False Claims Act (FCA), see 31 U.S.C. § 3730(b)(1), violate the Executive Branch’s exclusive grant of authority under Article II of the United States Constitution? This long-dormant question has been revived in a surprising context. In its recent decision in United States ex rel. Polansky v. Exec. Health Resources, No. 21-1052 (S. Ct. June. 16, 2023), the Supreme Court affirmed the government’s authority to intervene to dismiss a whistleblower action, even after initially declining to intervene in the case. Knowledgeable FCA practitioners expected this result. Less expected was Justice Thomas’s dissent, which argued that the case should have been remanded to allow the parties to brief and argue whether Article II forbids allowing private citizens to maintain FCA claims on behalf of the government. A concurrence by Justice Kavanagh (joined by Justice Barrett), while rejecting Justice Thomas’s call for a remand, nonetheless stated that “the Court should consider the competing arguments on the Article II issue in an appropriate case.” With three justices expressing interest in this question—and only four justices being required to grant certiorari—health care enforcement defense attorneys should now consider whether to raise the constitutionality of the FCA’s qui tam provisions when relators move forward to litigate cases that the government declines to pursue.

Though there has been much speculation and commentary among industry stakeholders, the Office of Inspector General (OIG) and the Office of the National Coordinator for Health Information Technology (ONC) have not yet begun enforcing statutory penalties associated with violations of the Information Blocking Rules. On July 3, 2023, OIG and Department of Health and Human Services (HHS) took a significant step toward enforcement of these penalties when they published long-awaited civil monetary penalty (CMP) final rule (CMP Final Rule) for certain Information Blocking Actors in the Federal Register.

The U.S. Food and Drug Administration (FDA) announced a new pilot program on June 21, 2023 that gives sponsors of oncology products the opportunity to submit validation and performance data for laboratory developed tests (LDTs) intended to support patient selection for such drugs. Although the pilot is limited to only nine participants, it is unclear based on the requirements of the program whether it will generate sufficient interest among oncology product sponsors to meet the objectives that the agency has established for it.

Homeopathic drugs have an unusual status in the United States. On the one hand, they are incorporated into the Federal Food, Drug, and Cosmetic Act (FD&C Act) within the definition of “drug,” which specifically includes articles recognized in the official Homoeopathic Pharmacopoeia of the United States (a historical perspective can be found in this ScienceInsider article from 2015, when government scrutiny was beginning to increase). But on the other hand, there is growing consensus that the effectiveness of such products is not supported by scientific evidence and that they are, in many cases, mere placebos that do not actually treat the patient’s medical conditions; in the worst cases, they contain harmful ingredients that may cause serious injury.