Health Law

Published on: December 9, 2021

Primer on Provider Requirements under the No Surprises Act (Part I)

Effective January 1, 2022 under the No Surprises Act, healthcare providers, facilities, and providers of air ambulance services will be subject to new requirements that generally apply to items and services provided to individuals enrolled in group health plans, group or individual health insurance coverage, and Federal Employees Health Benefit plans. The good faith estimate requirement and the requirements related to the patient-provider dispute resolution process also generally apply to the uninsured. These requirements generally do not apply to beneficiaries or enrollees in federal programs such as Medicare, Medicaid, Indian Health Services, Veterans Affairs Health Care, or TRICARE.

Below is an overview of some of the provider and facility requirements that will become effective on January 1, 2022. Stay tuned next week for further information.

No balance billing for out-of-network emergency services: Non-participating providers and emergency facilities will generally be forbidden from billing or holding liable beneficiaries, enrollees, or participants in group health plans or group or individual health insurance coverage who receive emergency services at a hospital or an independent freestanding emergency department for a payment amount greater than the in-network cost-sharing requirement for such services. There are exceptions for certain post-stabilization services if the notice and consent requirements are satisfied. However, the exception is not available for services furnished as a result of unforeseen, urgent medical needs that arise at the time an item or service is furnished, regardless of whether the notice and consent criteria are satisfied and regardless of whether they are emergency or non-emergency services.

Published on: November 1, 2021

HHS Proposes to Repeal Rules that Limit Its Authority

by Wachler & Associates, P.C.

The Department of Health and Human Services (HHS) recently proposed to repeal two rules implemented under the Trump Administration to moderate the power of the agency. The rules HHS seeks to repeal are the Good Guidance Rule and the Civil Enforcement Rule. Public comments on the proposal are due by November 19, 2021.

The Good Guidance Rule was implemented to make guidance documents easier for the public to access and provide input on, and created extra screening steps before HHS may implement guidance. The major provisions of the Good Guidance Rule are: (1) a requirement that each guidance document issued by HHS generally include certain information, including a statement that the guidance does not have the force and effect of law and is not binding unless specifically incorporated into a contract; (2) additional procedures for ‘‘significant guidance documents’’ (defined as those with an estimated impact of greater than $100 million), including a period of notice and comment, a requirement that the Secretary of HHS personally approve new guidance, and a requirement for submission to the Office of Information and Regulatory Affairs (OIRA) for review; (3) creation of a repository for all guidance documents along with a provision stating that guidance documents not in the repository are not effective and would be considered rescinded; and (4) procedures for the public to petition the Department to withdraw or modify any particular guidance document.

The Civil Enforcement Rule was implemented to provide greater notice to providers subject to civil enforcement actions and greater transparency of HHS’s civil enforcement actions. Under the Civil Enforcement Rule, before taking civil enforcement actions, HHS must provide the targeted party with an initial notice of the agency’s legal and factual determinations, an opportunity to object or respond, and the Department’s written response to the affected party’s objections.

Published on: October 5, 2021

CMS Proposes Repeal of Breakthrough Devices Medicare Coverage Rule

by Wachler & Associates, P.C.

The Centers for Medicare & Medicaid Services (CMS) recently announced a proposal to repeal the Medicare Coverage of Innovative Technology (MCIT) rule that has been delayed several times. The latest news in the MCIT saga comes from a CMS announcement expressing concerns with the final rule, specifically that it will require more time for adequate implementation.

The final rule was implemented to reduce the time it takes for FDA-approved medical technology to become covered under Medicare. The MCIT would reduce these wait times by granting Medicare coverage to breakthrough devices immediately after receiving FDA approval. The FDA designates medical devices as “breakthrough devices” when they are shown to be more effective at diagnosing or treating serious diseases than the currently available devices. This designation allows these devices to have reduced development, assessment, and review timelines.

However, CMS announced reservations about the final rule and has proposed changes. CMS’s primary concern is that the final MCIT is not acting in Medicare recipients’ best interest because it could provide coverage for breakthrough devices that are not reasonable and necessary to treat Medicare recipients’ diseases or conditions. This concern stems from the current guidelines for clinical trials for medical devices. Specifically, the FDA does not require Medicare recipients to be included in clinical trials for medical devices. Since Medicare recipients generally have more comorbidities than the general population, the clinical trials may not accurately reflect Medicare patient outcomes. CMS has also expressed concern that the final rule takes away its tools to deny coverage when it becomes apparent that a particular device can be harmful to the Medicare population. If the rule goes into effect, and a device approved under it is later found to be harmful to Medicare recipients, CMS would be limited in the actions it could take to withdraw or modify coverage. Lastly, CMS believes there could be confusion and disruption stemming from devices receiving approval without a clear path for appropriate coding and payment.

Published on: August 12, 2021

Court Ruling Shows Limits on FDA Authority to Regulate Medical Devices

by Wachler & Associates, P.C.

On July 6, 2021, the U.S. Court of Appeals for the D.C. Circuit issued a 2-1 opinion in Judge Rotenberg Education Center v. FDA that overturned the Food and Drug Administration’s (FDA) ban on the use of electric shock medical devices for particular purposes because the FDA is prohibited from regulating the practice of medicine. The Judge Rotenberg Education Center (Center) is a facility in Massachusetts that treats patients with severe behavioral conditions and intellectual disabilities. The Center manufactures its own electric stimulation device, known as a graduated electronic decelerator, and is the only facility in the country that uses electric shock therapy to treat individuals who severely self-injure or are aggressive. The Center admits patients that other facilities could not successfully treat, and is seen by some as a last resort for patients and their families.

The FDA first proposed to ban electric stimulation devices used to treat self-injurious or aggressive behaviors in April 2016, and a final rule banning such devices became effective in March 2020. Electrical stimulation devices are legally authorized for use in other medical settings, for example to prevent muscle atrophy and reduce muscle spasms in physical therapy patients. Thus, the key question that the Court addressed was whether the FDA has legal authority to ban an otherwise legal device from a particular use. The Court concluded that the FDA does not have such authority because a “use-specific” ban like the one at issue “interferes with a practitioner’s authority by restricting the available range of devices through regulatory action.” The Court further opined that “the FDA has no authority to choose what medical devices a practitioner should prescribe or administer or for which conditions.”

Section 360f of the Federal Food, Drug, and Cosmetic Act (Act) grants the FDA authority to ban medical devices intended for human use when such devices present “substantial deception or an unreasonable and substantial risk of illness or injury.” Section 396 of the Act prohibits the FDA from regulating the practice of medicine, specifically forbidding the agency from taking actions that “interfere with the authority of a health care practitioner to prescribe or administer any legally marketed device to a patient for any condition or disease within a legitimate health care practitioner-patient relationship.” Since electric shock stimulation devices are legally used in other settings, the FDA’s attempted use-specific ban does not render such devices as not legally marketed. As the Court stated, “any device that the FDA attempts to ban for one but not all uses will, accordingly, still be legally marketed.” Thus, the FDA only has the more comprehensive power to completely ban a medical device, but not the intermediate power to tailor a ban to only certain uses. The opinion underlines the limits of the FDA’s authority to regulate medical devices.

Published on: June 23, 2021

Sale of Goods in Physician Offices

by Wachler & Associates, P.C.

The sale of goods in physicians’ offices can afford patients greater accessibility to healthcare products while simultaneously enhancing quality of care. However, these transactions may pose ethical dilemmas for physicians along with the potential to negatively affect the physician-patient relationship. Physicians should be aware of these potential pitfalls. Specifically, both the sale of health-related and non-health-related goods by physicians may present a financial conflict of interest Such sales may also carry a risk of patient exploitation by placing undue pressure on patients. Local statutes, regulations, and board of medicine rules may further affect the practice.

The American Medical Association, (AMA) has cautioned that, in general, physicians should not sell non-health-related products from their offices. However, the AMA has expressed approval that physicians may sell low-cost non-health-related goods from their offices for the benefit of community organizations, provided that: (1) the goods are low-cost, (2) the physician takes no share in profit from their sale, (3) such sales are not a regular part of the physician’s business, (4) sales are conducted in a dignified manner, and (5) sales are conducted in such a way as to assure that patients are not pressured into making purchases. The most common examples are seasonable fundraisers for community organizations such as the local chapter of the Girl Scouts.

Although the details may vary from state to state, physicians may generally sell health-related goods from their offices. In response to the risk of patient exploitation, the physician may be required to limit sales to products that serve the immediate and pressing needs of their patients. In other words, physicians should only sell health-related products that align with their practice area. For example, it may be appropriate for a patient treated for a broken leg to purchase crutches from that same physician’s office where the patient was treated. Physicians who choose to sell health-related products from their offices should not sell any health-related products whose claim of benefit lacks scientific validity.

Published on: June 2, 2021

A Primer on Corporate Practice of Medicine

by Wachler & Associates, P.C.

The Corporate Practice of Medicine refers to the practice of medicine by a corporate entity, rather than an individual practitioner. That is, the corporate entity employs physicians. Many states prohibit the corporate practice of medicine or otherwise regulate what types of entities may employ physicians. The rationale is often a desire that medical decision-making remain with the physician and should not be influenced by a non-physician employer. These regulations are the reasons that physician “employment” is often organized into physician groups or profession corporations.

Each state treats the corporate practice of medicine differently, but there are three general approaches. First, some states fully prohibit the corporate practice of medicine. These states do not allow physicians to be employed by non-physicians and only allow physicians to form professional corporations, professional associations, or professional limited liability companies (PLLCs) that are owned exclusively by physicians. For example, Michigan generally requires that all shareholders in a professional corporation or PLLC that engages in the practice of medicine must be licensed physicians. Some states may allow other types of licensed health professionals to own a professional entity that employs physicians.

Second, some states have no restrictions on the corporate practice of medicine or otherwise allow physicians to be employed by entities controlled by non-physicians.

Published on: May 26, 2021

CMS Delays Rule on Breakthrough Devices …Again.

by Wachler & Associates, P.C.

Recently, the Centers for Medicare & Medicaid Services (CMS) announced another delay of the implementation of the new rule for Medicare Coverage of Innovative Technology (MCIT) and discussed several concerns it had with the new rule, raising doubts that CMS would ever implement the new rule without significant changes.

The new rule, as currently written, provides for four years of national Medicare coverage of innovative medical devices starting on the date of FDA market authorization or a manufacturer chosen date within two years thereafter. The rule was initially published by CMS on January 14, 2021 and was set to take effect in March 2021. However, shortly after the transition to the Biden Administration, CMS delayed the effective date until May 2021 as part of its general freeze of new regulations pending review. On May 14, 2021, CMS announced it would further delay the implementation of the new rule until December 15, 2021.

In the May 2021 announcement of the delay, CMS expressed its concerns with the new rule. Specially, CMS expressed concern that the rule establishes a four-year commitment to Medicare coverage for all breakthrough devices that have a benefit category without a specific requirement that the device demonstrates a health benefit in the Medicare population or that the benefits outweigh harms. CMS expressed a desire for more evidence of benefits to Medicare beneficiaries prior to Medicare coverage of a device.

Published on: April 27, 2021

Are COVID-19 Liability Waivers by Patients Enforceable?

by Wachler & Associates, P.C.

In general, liability waivers can be a useful tool for businesses and individuals to avoid personal injury lawsuits and liability. Typically, liability waivers are associated with participating in a dangerous activity, such as skiing, boating, gym classes, or school activities. The individual participating in the activity signs the waiver, acknowledging that he or she accepts the risks associated with the activity and agrees to release the business or individual from liability related to these risks. However, in response to the COVID-19 pandemic, liability waivers by patients for COVID-19 related risks are becoming increasingly common. While these waivers are likely enforceable, providers should be aware of potential legal issues if patients are asked to sign COVID-19 liability waivers.

Each state evaluates the enforceability of liability waivers differently. For example, in some states, such as Louisiana, Virginia, and Montana, personal injury liability waivers are all invalid. However, in most states, including Michigan, these liability waivers are generally enforceable, subject to certain restrictions. In Michigan, parties may contract against liability for harm caused by ordinary negligence, but not gross negligence, or willful and wanton misconduct. Therefore, a party will not be protected from liability if it intentionally or recklessly engaged in the conduct that caused harm. Although not explicitly stated in laws or statutes in Michigan, other important factors for providers to consider in drafting these liability waivers include:

Clear language. The waiver should clearly state that the individual is releasing the business or provider from liability. The terms should also be easy for the parties to understand.

Published on: March 18, 2021

A Peak Inside the $1.9 Trillion COVID-19 Relief Bill

by Wachler & Associates, P.C.

On March 11, 2021, President Biden signed the $1.9 trillion American Rescue Plan, a legislative package to help fund vaccinations, provide immediate relief to families during the COVID-19 pandemic, increase COVID-19 testing and identify new and emerging strains of COVID-19. The final bill includes several sources of funding for COVID-19 response and other healthcare programs:

Development of a national vaccination program

The bill includes $20 billion for a nationwide vaccination program, in partnership with state and local authorities. The vaccination program will include the creation of community vaccination centers as well as mobile vaccination units. Under the plan, the Biden Administration will work with Congress to expand the Federal Medicaid Assistance Percentage (FMAP) to 100%, to ensure all Medicaid enrollees will be vaccinated.

Published on: March 12, 2021

COVID Testing Providers Face Hurdles for HRSA Reimbursement

by Wachler & Associates, P.C.

As part of the response to the COVID-19 pandemic, Congress provided funding for testing of patients without health insurance. To receive this reimbursement for testing, providers must attest that the patient is uninsured. However, it is not clear how providers must gather this information, exposing providers to risk of enforcement actions.

For claims for COVID-19 testing and testing-related items and services, a patient is considered uninsured if the patient does not have coverage through an individual, or employer-sponsored plan, a federal healthcare program, or the Federal Employees Health Benefits Program at the time the services were rendered. For claims for treatment for positive cases of COVID-19, a patient is considered uninsured if the patient did not have any health care coverage at the time the services were rendered. For claims for vaccine administration, this means that the patient did not have any health care coverage at the time the service was rendered.

The funding of testing for the uninsured is administered by the Health Resources & Services Administration (HRSA) under the COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine Administration for the Uninsured Program. Congress has allocated $2 billion to this program through The Families First Coronavirus Response Act (FFCRA) and the Paycheck Protection Program and Health Care Enhancement Act (PPPHCEA), as well as a portion of the Provider Relief Fund.