Duane Morris Health Law

April 24, 2017 by Patricia S. Hofstra

Cherokee Nation Sues Drug Wholesalers and Retailers for Opioid Abuse

On April 20. 2017, the Cherokee Nation filed suit in the District Court of the Cherokee Nation alleging that certain wholesale drug distributors and pharmacies have caused the citizens of the Cherokee Nation to become addicted to opioid drugs and that the defendants could and should have taken steps to prevent the opioid epidemic. The complaint states that the defendants created an environment in which drug diversion can flourish causing damages to the Cherokee Nation; including the cost of medical care, counseling and rehabilitation services, child welfare, law enforcement and public safety, and lost productivity of Cherokee Nation citizens and businesses. The Cherokee Nation is asking the Cherokee Court to award injunctive relief, compensatory damages, statutory damages, punitive damages and attorneys’ fees. The Complaint states that the District Court of the Cherokee Nation has jurisdiction because the defendant distributors conduct business with the Cherokee Nation and the defendant pharmacies fill prescriptions for Cherokee Nation citizens and hire Cherokee Nation citizens.

This case raises a number of interesting issues regarding the duties of pharmacies to ensure that they dispense only those prescriptions that are based on legitimate medical need. This is a case to watch.

April 17, 2017 by Patricia S. Hofstra

Telemedicine

I recently worked on a telepsych agreement for a hospital client. Under the agreement, a distant site will provide mental status assessments of emergency department patients remotely. Some of the issues flowing from the contract that we addressed were whether patient consent was required for the telepsych consult and how to credential the distant site providers. Legal and regulatory requirements for patient consent vary state by state and there are credentialing options for distant site providers. With or without a legal or regulatory requirement for patient consent, we recommended obtaining patient consent, when possible as best practice. We addressed how our hospital client would pay the distant site providers, but one thing we didn’t address in the telepsych agreement was payer coverage for telepsych services.

We understand that 31 states and the District of Columbia require private insurers to cover telehealth, but that the laws differ state to state. Medicaid and Medicare also cover telehealth in varying degrees.

In March, I attended a three day meeting of women business leaders in health care where telehealth was a topic in multiple formal and informal discussions. My previous experience in telehealth had been limited to working with a few direct to consumer telemedicine platforms and intensive care monitoring. I now know that I can get psychiatric, nutrition and a multitude of other services via telehealth. Telehealth is expanding exponentially. While it will never fully replace a face to face visit with a health care provider, it does offer a way to better address certain patient needs.

Stay tuned to this Blog for more thoughts on telehealth.

April 14, 2017 by Duane Morris

Healthcare Fraud Takedowns

As a former federal prosecutor in Chicago, I am well acquainted with the phrase “takedowns.” For the unwary, a subject-area “takedown” is a practice used by federal prosecutors to send a message to a given industry. Prosecutors investigate and prepare to charge cases in a given industry sector and then release the charges nationally on the same day along with a press release. The idea is that such public “takedowns” serve as a deterrent to future criminal activity in the industry. For example, almost every April 15th, prosecutors across the country release charges in dozens of tax-fraud cases.

Recently, this practice has expanded into the healthcare industry. See more on the The Department of Health and Human Services Office of Inspector General website. In June 2016, there was the largest healthcare fraud takedown in DOJ history – prosecutors charged more than 300 defendants in 36 federal judicial districts (and this does not even include civil fraud investigations).

To read the full text of this blog post, please visit the Duane Morris White-Collar Criminal Law Blog.

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.