Health Law – Page 10 – Duane Morris Health Law

April 3, 2017April 3, 2017 by Seth A. Goldberg

FTC to Keep Healthcare and Pharmaceutical Sectors in Antitrust Crosshairs

While the Trump Administration’s antitrust policy is still developing, and most believe it will provide for less enforcement than antitrust policy under the Obama Administration, the Federal Trade Commission announced on Friday, March 31, that it has no intention of letting up on the healthcare and pharmaceutical sectors, where the FTC has been increasingly active over the past few years. In 2016, the FTC challenged the mergers of hospitals/health systems in Illinois and Pennsylvania, and initiated actions to protect pharmaceutical price competition; early 2017 has been no different.

Thus, while the Trump Administration’s antitrust policy unfolds, and it may be less strict than the antitrust policy of the prior administration, healthcare and pharmaceutical industry participants should stay vigilant about antitrust compliance because the FTC intends to remain focused on competition in those sectors.

January 30, 2017 by Neville M. Bilimoria

Cybersecurity and Emergency Preparedness for Long-Term Care

On January 13, 2017, the Centers for Medicare and Medicaid Services (“CMS”) sent a Memorandum (“Memo”) to State survey agency directors encouraging long-term care providers to “consider cybersecurity when developing or reviewing their emergency preparedness plans.” The Memo was a follow-up to the CMS long-term care emergency preparedness rule published in the Federal Register on September 16, 2016: “Medicare and Medicaid Programs; Emergency Preparedness Requirements for Medicare and Medicaid Participating Providers and Suppliers.” Under that final rule, long-term care facilities were held to additional standards, including requirements to have emergency and standby power systems in place. Nursing homes were also required to create plans regarding missing residents that could be activated regardless of whether the facility has activated its full-scale emergency plan. The rule was spurred on by recent flooding in Baton Rouge, Louisiana, and other emergency disasters, such as Hurricane Sandy and the 2009 H1N1 pandemic, according to CMS.

Whether State surveyors will actually enforce lack of cybersecurity plans for emergency preparedness as violations remains to be seen from this Memo. But certainly, a State survey agency could impose deficiencies for failure to have a proper cybersecurity plan and/or a proper cybersecurity back‑up plan as part of a facility’s emergency preparedness going forward. It is not clear why CMS decided to send this encouragement Memo three months after the Final Rule on emergency preparedness, but it likely has something to do with the fact that 2016 was a banner year for HIPAA privacy infractions and HIPAA enforcement by the Office for Civil Rights (“OCR”), the entity responsible for HIPAA compliance. In 2016, payouts for HIPAA violations skyrocketed to record heights of $23.51 million from OCR enforcers against health care providers. That number was triple the previous record of almost $7.94 million in payouts in 2014, followed by $6.19 million in payouts in 2015.

Continue reading “Cybersecurity and Emergency Preparedness for Long-Term Care”

October 3, 2016 by Duane Morris

CMS Arbitration Rules

By Susan V. Kayser

CMS has released the final version of a broad-based proposed rule update that will take effect November 28, 2016. One of the most notable provisions is a prohibition on including a mandatory arbitration provision in a nursing home admission agreement. Long a bone of contention, with strong advocacy efforts on each side of the question of whether such mandatory clauses should be allowed, it remains to be seen whether the rule will be challenged in court. Those against mandatory arbitration say it deprives individuals of their day in court; those in favor say there are benefits, including less expensive and quicker resolution of claims.

Only admissions agreements of future residents will be affected by the new rule. Providers should note too that arbitration clauses are not banned altogether. In a blog post on September 28, 2016, Acting CMS Administrator Andy Slavitt stated “[f]acilities and residents will still be able to use arbitration on a voluntary basis at the time a dispute arises.” He went on to say that “[e]ven then, these agreements will need to be clearly explained to residents, including the understanding that these arbitration agreements are voluntary, and that these agreements should not prevent or discourage residents and families from talking to authorities about quality of care concerns.”

The new rule includes a number of other new or modified provisions, which according to CMS were designed to set higher standards for quality and safety in long-term care facilities and protect and empower residents, with a focus on preventing abuse and neglect in facilities.

August 23, 2016 by Neville M. Bilimoria

Government Cracks Down On Nursing Home Use of Social Media

On August 5, 2016, the Centers for Medicare and Medicaid Services (CMS) published a Survey and Certification Memorandum (Notice) urging State health departments to enforce violations by nursing homes in posting patient images on social media. This development was interesting given that the Office for Civil Rights (OCR), the enforcer of the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules, presumably should already be cracking down on any such violations of resident rights as a violation of HIPAA. According to Modern Healthcare, increased instances of nursing home staff inappropriately posting resident pictures on social media may have sparked this pronouncement by CMS.

Specifically, CMS will more strictly enforce, through State agencies, corrective actions to ensure that employee postings of residents in a degrading manner do not occur in the nursing home setting. Interestingly, the Notice does not discuss nursing homes reporting such employee conduct to OCR, but does indicate that employees should report such postings on social media of residents as abuse “to at least one law enforcement agency.” Continue reading “Government Cracks Down On Nursing Home Use of Social Media”

August 22, 2016 by Duane Morris

Duane Morris’ Michael E. Clark to Present at ABA’s Third Medical Device & Healthcare Technology Compliance Institute

Duane Morris special counsel Michael E. Clark will serve as program chair and moderate the panel discussion, “Yates Memorandum: The New Normal?” during the American Bar Association’s (ABA) Third Medical Device & Healthcare Technology Compliance Institute, to be held on October 13–14, 2016, in Washington, D.C. Mr. Clark’s presentation will take place on Thursday, October 13, at 9:00 a.m.

The session will feature a discussion of the Department of Justice’s new policy to prosecute corporate executives with a focus on the ethical considerations of representing corporations and executives. There will be an emphasis on ethical considerations, including scope of representation, client identification and duties. CLE Ethics Credit is available.

For more information, please visit the event listing on the Duane Morris website.

June 27, 2016September 12, 2018 by Duane Morris

SCOTUS Strikes Down Texas Statute in Whole Woman’s Health v. Hellerstedt

In a 5-3 decision today, the Supreme Court of the United States in Whole Woman’s Health v. Hellerstedt, No. 15-275, slip op. (June 27, 2016) reversed a decision of the Fifth Circuit and overturned as unconstitutional a Texas law that (1) required abortion providers to have “active admitting privileges” at a hospital within 30 miles of the location at which they provide abortions and (2) required abortion facilities to meet standards adopted for ambulatory surgery centers. The Court wrote that each of the requirements “places a substantial obstacle in the path of women seeking a previability abortion, each constitutes an undue burden on abortion access, and each violates the Federal Constitution.” A team of Duane Morris attorneys, including Philip H. Lebowitz, Erin M. Duffy, Katharyn I. Christian McGee, Alison Taylor Rosenblum, and Erica Fruiterman, filed an amicus curiae brief on behalf of medical staff professionals in support of petitioners Whole Woman’s Health et al. In its decision, the Supreme Court cited Duane Morris’ amicus brief, noting, “Other amicus briefs filed here set forth without dispute other common prerequisites to obtaining admitting privileges that have nothing to do with ability to perform medical procedures.” The brief was one of only a handful of amici curiae briefs cited in the decision out of a total of 41 such briefs filed on behalf of petitioners.

April 12, 2016April 12, 2016 by Seth A. Goldberg

Wound Company’s Antitrust Claim Tossed

Having dismissed the Sherman Act Section 1 conspiracy and Section 2 monopolization claims of Suture Express in August 2013, a federal judge in Kansas, on April 11, 2016, tossed the remainder of plaintiff’s $200 million claim, which asserted that Cardinal Health and Owens & Minor, wound care companies, entered into a predatory pricing scheme to prevent hospitals from buying the plaintiff’s competing products. Suture Express, Inc., v. Cardinal Health, Inc., et al., 2:12-cv-02760.

The court determined that the summary judgment record did not demonstrate an injury to competition in the acute care market resulting from defendants’ alleged pricing arrangement, as the plaintiff failed to establish that defendants had market power. Rather, according to the court, the record on summary judgment demonstrated a competitive market, where a number of defendants’ rivals have been able to grow their businesses and compete effectively against defendants, while defendants’ market shares have remained relatively stable; in fact, the court found that defendants’ themselves competed against one another.

In dismissing the case, the court noted, as courts usually do in cases where the record demonstrates, at most, an injury only to the plaintiff, the antitrust laws were designed to protect competition not competitors, and the failure to demonstrate an injury to competition in the market is fatal to a plaintiff’s Sherman Act claims.

Although, as this case shows, antitrust defendants may have to endure lengthy and expensive litigation, experienced antitrust counsel, familiar with the deep and growing body of defense-oriented antitrust decisions, have a number of arrows in their quiver for shooting down antitrust claims.

March 29, 2016March 30, 2016 by Duane Morris

Hackers Unleash “Ransom” Attack on Health System, Forcing It to Shut Down Computer Systems

By Duane Morris partner Lisa W. Clark

On March 28 MedStar Health, the largest health system in the Washington, D.C. area, shut down its computer systems, including its electronic health records, on account of an apparent “ransom” attack in which the hackers infected its system with a virus. From media reports, it appears that the hackers demanded an unknown sum to stop the malware attack. The FBI is already involved. This incident, following February’s successful ransom attack on Hollywood Presbyterian Medical Center, reinforces the need for strong data security protection as well, as an incident response plan that includes law enforcement.

February 26, 2016 by Seth A. Goldberg

FTC Settles Antitrust Claims Against Orthopedists

Following an investigation, on December 14, 2015, the FTC filed a Complaint and a Decision and Order that resolved antitrust claims against 19 orthopedists in Berks County, PA, arising out of a 2011 merger of six independent physician groups in which the orthopedists practiced. Those six groups merged to form Keystone Orthopaedic Specialties (“Keystone”).

According to the Complaint, the 19 orthopedists comprised 76% of the 25 physician orthopedic physician services market in Berks County. Prior to the merger, competition among orthopedists was robust, with the 25 orthopedists in the market practicing in 11 different physician groups. The merger, however, resulted in market concentration likely well above the thresholds for presuming market power and illegality under the Herfindahl-Hirschman Index.

According to the Complaint, because of the highly concentrated market and entry barriers, health plans operating in Berks County were unable to establish networks of orthopedists for their enrollees in Berks County, and were therefore forced to pay higher rates to the Keystone orthopedists, which they passed on to their enrollees.

The Decision and Order imposes extensive multi-year restrictions on the types of joint arrangements the Keystone orthopedists and their practices may enter into going forward, prohibiting some arrangements altogether, while requiring FTC consent for others.

The lesson of Keystone is simple. Physicians practicing in independent physician groups who are contemplating a joint venture of any kind should retain antitrust counsel to advise on and resolve any antitrust issues before the arrangement is consummated in order to avoid regulator scrutiny and the potential for the severe penalties and practice restrictions that come with it.

February 17, 2016 by Neville M. Bilimoria

ACOs Waking Up to the Value of Post-Acute Care Providers

Recently, the American Hospital Association published in its newletter Trendwatch a detailed 16 page article entitled “The Role of Post-Acute Care in New Care Delivery Models,” December 2015. The article discusses what we have been trying to tell our post-acute care, especially nursing home clients, for years: become a valued partner of an Accountable Care Organization (“ACO”) and be ready to show your value to those ACOs, or continue to operate as you historically have at your own peril.

When ACOs first started, there was virtually no room or focus on long-term care providers being involved in an ACO. Some hospitals talked initially about home health care, but very little discussion was geared towards long-term care providers being in an ACO network because hospitals did not understand the long-term care environment. Continue reading “ACOs Waking Up to the Value of Post-Acute Care Providers”