2011 Uncertainty Brings Worry and Change

2010 brought significant changes in the law for the healthcare industry with the passage of the Patient Protection and Affordable Care Act (“PPACA”), the Provena decision regarding real estate tax exemption, and the Lebron case invalidating Illinois’ cap on noneconomic damages in medical malpractice cases.  2011 brought more changes in the law, new PPACA regulations, worry and uncertainty to the healthcare industry.

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CMS Releases Final ACO Regulations

Yesterday afternoon the Centers for Medicare & Medicaid Services (CMS) released the long anticipated final Accountable Care Organization (ACO) regulations, after considering the nearly 1200 comments submitted in response to the earlier proposed regulations.  ACOs, created under the Affordable Care Act, are a model of health care that focuses on collaboration between providers across a continuum of care including different health care settings.  The new regulations set forth the specifics for the program including payment mechanisms through which providers will be compensated for care provided through the integrated ACO model, as well as performance requirements for participating providers.  The first ACOs will start operating in 2012.  

Over the next few weeks, Duane Morris attorneys will be reviewing the final regulations and providing additional guidance to providers about the effect of the regulations. 

Read the full set of regulations here.

Final Antitrust Policy Statement Regarding ACOs in Medicare Shared Savings Program

On October 20, 2011, the U.S. Federal Trade Commission and the Department of Justice, which coordinate enforcement of the antitrust laws, issued their final Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program (the “Enforcement Policy”). The fundamental principle of the Enforcement Policy is that the agencies will apply the rule-of-reason analysis to all accountable care organizations applying for or participating in the Shared Savings Program and, if the same services are involved, to commercial insurance products modeled on the Shared Savings Program.

Please read the associated Duane Morris Alert for full details.


IRS Likely to Increase Enforcement of Tax-Exempt Bonds in 2012

The IRS is likely to use additional resources in fiscal 2012 for compliance programs aimed at taxpayers filing Form 990 Schedule K, "Supplemental Information on Tax-Exempt Bonds".  

Those additional resources will target section 501(c)(3) bonds, and the information gleaned from reviewing the Schedule K returns will result in extremely targeted examinations to gather information on that specific matter. Promulgation of the Schedule K reviews has been a multiyear effort and the IRS has received many comments on the subject, mostly from accounting firms. The issues raised in those comments have been catalogued to determine what improvements need to be made.  

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OIG’s 2012 Work Plan For Nursing Facilities: Same Fraud, Different Enforcement

Recently, the United States Department of Health and Human Services Office of Inspector General (“OIG”) published its Work Plan for fiscal year 2012 (“Work Plan”) and delineated focus points for nursing facilities and new enforcement in 2012.  The Work Plan is not much different than previous work plans with the exception of increased areas of enforcement, as well as a few new areas to be looked at by OIG. 

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HHS Suspends ACA’s Class Act for Long-Term Care Insurance

Late this afternoon the Department of Health & Human Services' (HHS) Secretary Kathleen Sebelius pulled back a long-term care insurance program, the Class Act, that was passed under last year's Affordable Care Act.  The Class Act's goal was to create an insurance program that could cover the health care costs associated with many activities of daily living, including bathing and toileting.   Speaking today, the Health & Human Services Secretary Kathleen Sebelius said that there didn’t appear to be a viable path for the Class Act, in part due to increasing concern that the program would have created substantial long-term costs. 


 Read Kathleen Sebelius’ full letter to Congress here[Read More]

Government Accountability Office Reports that 340B Program Needs Greater Oversight

Pursuant to a mandate in the Affordable Care Act, the Government Accountability Office (GAO) recently completed its review of the 340B Drug Pricing Program, which allows certain health care entities such as federal grantees and hospitals to receive discounted outpatient drugs.  There are currently over 16,500 entities that participate in the 340B program. 

According to the GAO’s report, health care entities receiving the 340B discounts reported that they were generating revenue that exceeded drug-related costs, though several entities said that their revenues did not exceed their drug-related costs.  Nonetheless, the GAO found that the Health Resources & Services Administration—the arm of Health & Human Services responsible for administering the program—provided insufficient oversight to ensure that the 340B program was being properly administered.  The report found that clear direction was lacking, that oversight did not ensure that drugs purchased at the discounted prices are only transferred to eligible patients or that manufacturers are selling the drugs at the appropriate price; and that the number of hospitals participating in the 340B program heightened the need for greater oversight.     

Read a full copy of the GAO’s report here.


Duane Morris Health Law

Reporting legal developments in the healthcare industry and the latest on the implementation of
the Healthcare Reform Act impacting providers, employers and physicians.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.