Wachler & Associates Health Law Blog

Published on: July 24, 2018

Azar Proposes Significant Changes to 340B Drug Discount Program

The 340B drug discount program was originally created to provide affordable and comprehensive drug services to indigent patients. Manufacturers agree to provide prescription drugs to covered entities at significantly reduced prices, who can then offer the discounted prescription drugs to eligible patients. Covered entities include: HRSA-supported health centers, Ryan White clinics, State AIDS Drug Assistance programs, Medicare/Medicaid Disproportionate Share Hospitals, Children’s Hospitals, and other safety net providers.

The Department of Health and Human Service (HHS) Secretary Alex Azar is concerned about the 340B program; he suggests that there has been abuse of the program by covered entities. Azar stated that “[t]he current nature of 340B is such that it is quite possible for the program’s benefits to be diverted to unintended purposes, unrelated to supporting care for low-income patients.” In fact, many 340B hospitals are able to receive drug discounts for all of their patients, even though there are only a small amount of uninsured and underserved patients at the hospital. A report by the OIG found that a majority of 340B entities do not even offer the reduced prices to uninsured patients, allowing them to profit off the program.

In a meeting with lawmakers, Azar proposed to cut the discount to 20% of the list price, which is significantly lower than the typical 40-60% discount. This effort by HHS coincides with the Trump administration’s goal to lower prescription drug prices.

Published on: July 17, 2018

CMS Modernizing Medicare and Revitalizing the Doctor-Patient Relationship

by Wachler & Associates, P.C.

On July 12, 2018, the Centers for Medicare and Medicaid Services (“CMS”) released a statement proposing significant changes to Medicare that would modernize and restructure the Medicare program to deliver increased quality of care at a lower cost to beneficiaries. This will be done by utilizing a value-based healthcare system that works with modern-day technology. The proposal primarily alters the Medicare Physician Fee Schedule and Quality Payment Program.

CMS’s proposal coincides with its Patients Over Paperwork initiative, because it reduces the paperwork requirements for billing, thereby enabling doctors to spend more time with their patients. The proposed changes to the Physician Fee Schedule and Quality Payment Program will streamline documentation requirements to reduce the administrative burdens on providers. Generally, providers create medical records that use boiler plate language to satisfy Medicare billing requirements, which often contain few details specific to the patient and their personal stories. Allowing providers to designate a plan of care based upon what the provider determines from the time spent with the patient and not based upon documentation guidelines will significantly increase the quality of care.

If the proposal is effectuated, it will modernize payment policies so that telehealth will be more available to Medicare beneficiaries. When a beneficiary virtually contacts their provider (through telephone or other telecommunication devices) to determine whether they need and in-office visit or not, Medicare would cover this service. Additionally, there would be coverage for a physician’s time when they review images or videos sent to them for a diagnosis. CMS would also like to have a patient’s updated medical records follow the patient throughout the healthcare system. This would increase transparency and collaboration by allowing all of the patient’s providers to see the patient’s medical history in full.

Published on: July 2, 2018

Chronic Care Act Allows Medicare to Provide More Benefits for the Chronically Ill

by Wachler & Associates, P.C.

Recently, Congress enacted a law offering additional benefits to Medicare beneficiaries with various chronic illnesses, such as diabetes, complications from injury, and heart failure. The Creating High-Quality Results & Outcomes Necessary to Improve Chronic (CHRONIC) Care Act adds coverage to nutrition, transportation, and housing in order to be proactive in the prevention and minimization of chronic illnesses.

The new measures will only apply to individuals with a Medicare Advantage (MA) plan, which is a HMO or PPO plan offered by private companies and approved by Medicare. According to Title III of the Act, the changes are part of a MA value-based insurance design, allowing MA plans to create structures that vary benefits, cost-sharing, and supplemental benefits offered to enrollees with qualifying chronic diseases. This insurance design model is being tested in a number of states, including Michigan. The model approach will inform policymakers of the services that offer the most benefits to different populations, which may prompt policymakers to expand those benefits to people in the rest of Medicare.

MA plans will include services such as in-home assistance with bathing, nursing, and medication; supervised housing for those with dementia; wheelchair ramps; transportation to doctor’s appointments; meal delivery; and expanded telehealth. The Act also expands telehealth for Accountable Care Organizations (ACOs) by allowing the patients’ homes to be designated as an originating site, and by eliminating the usual telehealth geographical limitations for ACOs. Beneficiaries dealing with end-stage renal disease (ESRD) will now be able to receive in-home dialysis via telehealth so long as the individual receives a face-to-face clinical assessment once every three months.

Published on: June 27, 2018

House Passes Bill to Increase Opioid Addiction Treatment Access

by Wachler & Associates, P.C.

On June 22, 2018, the House of Representatives passed “one of the most significant congressional efforts against a drug crisis in our nation’s history,” according to Representative Greg Walden (R-Oregon). The legislation makes it easier for providers to treat patients suffering from Substance Use Disorder (SUD) and Opioid Use Disorder (OUD). The bill passed with strong bipartisan support, with a vote of 396 to 14. The final bill, titled the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act, combined 58 smaller bills to create one comprehensive package that includes improvements to Medicaid, Medicare, and other various ways to address the opioid crisis.

The bill expands the use of telehealth services for addiction treatment and increases the accessibility to providers offering medication-assisted treatment. In addition, the Institutes for Mental Disease exclusion, a law which blocked Medicaid from funding inpatient stays in mental/behavioral health facilities, was partially repealed under the bill, so that now state Medicaid programs may cover up to 30 days of inpatient care for eligible individuals with OUD. Also, privacy protections for addicts that forbade any physician or other medical provider from sharing a patient’s medical history with another practitioner were lessened. Thus, the Department of Health and Human Services (HHS) must establish hospital protocol that makes doctors aware of a patient’s addiction history in order to prevent accidental opioid prescription to patients suffering from OUD.

Aside from those key provisions, the bill also addresses other solutions to the opioid crisis. It is expanding Medicare coverage for OUD by adding methadone clinics to the program, expanding access to Medicaid for former foster youth and those transitioning out of incarceration, and increasing money for states to fund more Medicaid providers who treat OUD. Furthermore, the bill will increase the availability of naloxone (a rescue shot for opioid overdoses), ramp up the fight against fentanyl and other synthetic drugs, and order the Food and Drug Administration to explore non-addictive pain treatments.

Published on: June 19, 2018

Chapter 2A of Michigan Business Corporations Act Amended to Clarify Inconsistencies

by Wachler & Associates, P.C.

On June 24, 2018, amendments to the Professional Service Corporation Provisions (Chapter 2A) of the Michigan Business Corporations Act (BCA) will be in effect. In 2013, the Professional Service Corporation Act was incorporated into the body of the BCA as Chapter 2A, but was drafted in a way that created conflicting language between multiple provisions. According to Justin Klimko from the Corporate Laws Committee (Business Law Section), the main goal of amending Chapter 2A this year is to clarify that entities may be shareholders in Professional Corporations (PCs) if all of their owners are properly licensed. The amendments also clarify when individuals must sever their relationships with a PC.

The inconsistent language in Chapter 2A of the BCA created confusion as to whether entities may or may not be shareholders of PCs. Various sections were amended to address the discrepancies.

Under the previous language, PCs were prohibited from issuing shares “to anyone other than an individual who is licensed…” This language was inconsistent with other sections of Chapter 2A because it seemed to exclude entities. Thus, the new amendments resolve this contradiction by clarifying that a PC may issue shares to “an entity that is directly or beneficially owned only by persons that are licensed persons in 1 or more of the professional services provided by the professional corporation.” Furthermore, the amendments added to the definition of “licensed person” to allow the entity itself to be a licensed person if the entity is licensed to practice a professional service.

Published on: June 15, 2018

OMHA Releases Details on Long-Awaited Settlement Conference Facilitation Expansion

by Wachler & Associates, P.C.

Settlement Conference Facilitation (SCF) is an alternative dispute resolution process which provides appellants and the Center for Medicare and Medicaid Services (CMS) an opportunity to discuss a mutually agreeable resolution for claims appealed to the Administrative Law Judge (ALJ) or Medicare Appeals Council (Council) levels of appeal. SCF is a one-day mediation, in which an OMHA facilitator assists the appellant and CMS in negotiating a lump-sum settlement on eligible claims, without making official determinations of fact or law.

OMHA has modified the program’s eligibility criteria for appellants and appeals under the new expanded program, which was officially released June 15, 2018. For appellants, any Medicare Part A or Part B provider or supplier (with an assigned National Provider Identifier number) is eligible for participation, so long as that provider or supplier has not filed for bankruptcy or expects to file for bankruptcy in the future; does not have past or current False Claims Act litigation or investigations against them or other program integrity concerns such as civil, criminal or administrative investigations; and has either: (1) 25 or more eligible appeals pending at OMHA and the Council combined, or (2) less than 25 eligible appeals pending at OMHA or the Council and at least one appeal has more than $9,000 in billed charges.

The updated appeals eligibility criteria are as follows:

Published on: June 4, 2018

OIG Notifying Providers of Incorrect Billing Practices

by Wachler & Associates, P.C.

The Office of Inspector General (“OIG”) has been sending notices to providers recently, suggesting that the providers have been billing incorrectly, leading to overpayments from Medicare. The alleged issue stems from the billing of extremity venous studies. When performing these studies, providers will often bill under HCPCS Codes 93970 or 93971 and 93965 for the same patient on the same date of service.

The reporting requirements are unclear, and there are no bundling edits to stop practices from reporting both services for the same patient on the same day. Nevertheless, the OIG has been notifying providers that they are looking into the billing of both codes on the same dates of service, implicating that providers have been billing fraudulently.

The 2016 CPT Code Book describes the codes as the following:

Published on: May 31, 2018

Pfizer Agrees to Pay $24 Million to Settle Anti-Kickback Claims

by Wachler & Associates, P.C.

On May 24, 2018, the U.S. Department of Justice announced a $23.85 million settlement with Pfizer, Inc., to settle anti-kickback claims against the company. The settlement arose after an investigation led by U.S. Attorney Andrew Lelling, which looked into the drug industry’s support of patient assistance charities. Pfizer is now among a group of multiple drug companies (Celgene Corp., Aegerion Pharmaceuticals, and Jazz Pharmaceuticals) who have settled with the Department of Justice for their use of patient assistance charities. Pfizer also signed a five-year monitoring agreement with the Department of Health and Human Services Office of Inspector General, and is required to implement measures to ensure that its arrangements with patient assistance charities are in compliance with the law

Pfizer was allegedly using an “independent” charity to pay illegal kickbacks to Medicare patients, covering out of pocket costs for prescription drugs. Pfizer made donations to Patient Access Network Foundation (PAN), a copay assistance nonprofit organization, and used a specialty pharmacy, Advanced Care Scripts, to direct Medicare patients taking its drugs toward the foundation to cover their copays.

The scheme centered around three drugs, two for kidney cancer (Sutent and Inyalta), and one for arrhythmia (Tikosyn). Pfizer was allegedly aware that PAN used their donations to cover the copays of patients taking these drugs. In fact, PAN and the pharmacy would notify Pfizer when patients using these drugs got the copay assistance. Price increases of the drugs were concealed from patients but left Medicare with a higher bill.

Published on: May 24, 2018

Rebranding of the Medicare and Medicaid EHR Incentives Program

by Wachler & Associates, P.C.

On May 7, 2018, the Centers for Medicare and Medicaid Services (“CMS”) released a proposed rule that would rebrand the current Medicare and Medicaid Electronic Health Records (“EHR”) Incentives program into the Promoting Interoperability program (“PI”).

The EHR incentives program, created in 2011, encouraged eligible providers to adopt, implement, upgrade and demonstrate meaningful use of certified electronic health record technology (“CEHRT”). This program awarded over 544,000 health care providers with payment by February 2018.

With the great success of the incentives program, CMS is proposing changes that would create more transparency between patients and providers through greater access to health care information. To relieve burden to patients, and increase the ability to exchange health information among providers and patients, sharing and extracting files across systems is a new CEHRT requirement. Moreover, it will support increased patient access to their personal health information through secure email transmissions. The proposed PI program would also provide patients access to hospital price information via the internet.

Published on: May 15, 2018

OIG Issues Report on Toxicology Overpayments

by Wachler & Associates, P.C.

Urine drug testing is medical protocol for patients prescribed opioid drugs in order to monitor compliance and expose possible drug abuse or diversion. In the wake of the opioid crisis, there has been an increase in the frequency and cost of urine drug tests, resulting in a corresponding increase in spending by Medicare and private insurance on such tests. Between 2011 and 2014, spending on urine drug screens and genetic tests by Medicare and private insurance quadrupled to an estimated $8.5 billion per year.

The increase in the cost of urine drug tests is attributable to more expensive and high-tech ways of running the tests. Presently, laboratories are moving away from simple urine screenings and installing machines for urine drug tests. There is a financial incentive attached to machine tests; under Medicare rules, each drug tested for within a single specimen validity test may be billed individually.

The spike in reimbursement by Medicare and private insurance has caught the attention of the federal government. In 2010, the Centers for Medicare & Medicaid Services (“CMS”) imposed stricter rules on billing for simple urine screens; however, these rules do not cover machine testing. In addition, in 2011, the federal government settled with Millennium Health, LLC, one of the largest urine drug testing laboratories in the United States, for $256 million after it was alleged to have billed medically unnecessary urine drug and genetic tests.