Over the past week, the U.S. Food & Drug Administration (FDA) has taken a number of steps to enable manufacturers and distributors of face masks to more efficiently make their products available to the marketplace. FDA has accomplished this by establishing criteria that would allow manufacturers to bypass normally required (and often time-consuming) regulatory review.
To read the full text of this Duane Morris Alert, please visit the firm website.
Immediate funds are now available for providers to receive a cash influx at a critical time. The challenge will not be receiving the funds, but rather keeping the funds after a future audit of compliance with the terms and conditions.
On April 10, 2020, the United States Department of Health and Human Services (HHS) announced the immediate distribution of an initial $30 billion in relief funding to providers in support of the nationwide COVID-19 response. The distribution is part of the $100 billion provider relief fund included in the Coronavirus Aid, Relief and Economic Security (CARES) Act recently passed by Congress. Importantly, HHS has noted that these are payments, not loans, to healthcare providers, and will not need to be repaid unless the provider does not comply with the terms and conditions.
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As discussed in our March 18 Alert, the Secretary of Health and Human Services has issued a declaration authorizing drugs, devices and biologics used to treat or mitigate COVID-19 as covered countermeasures under the Public Readiness and Emergency Preparedness (PREP) Act. Following Secretary Azar’s declaration of a public health emergency, covered persons may obtain immunity under federal law for all claims arising from manufacturing, distributing or administering covered countermeasures, subject to the conditions laid out at 42 U.S.C. § 247d-6d, the declaration and other applicable regulations.
Subsequent to our previous Alert, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (CARES Act), which expanded the covered countermeasure protections offered by the PREP Act.
To read the full text of this Duane Morris Alert, please visit the firm website.
The American Thoracic Society (ATS) on April 3, 2020 published a guidance document providing several suggestions for treatment of COVID-19. The document, entitled “COVID‐19: Interim Guidance on Management Pending Empirical Evidence,” was developed by an ATS-led international task force and addresses several recently publicized potential treatment regimens. While the document explicitly does not constitute ATS’s official position on treatment of COVID-19 infections, the authors explain that it is intended to provide “interim guidance for therapeutic interventions to frontline clinicians, based upon scarce direct evidence, indirect evidence, and clinical observations and experiences of clinicians around the world who have battled COVID-19.” The document’s “suggestions” were developed based on the survey responses of 80 clinicians who have been involved in treatment of COVID-19 around the world.
The guidance document addresses a number of potential therapeutic interventions as well as the circumstances and parameters under which those interventions may or may not be recommended for use. The authors point toward the need to gather significantly more data on the proposed treatments, but acknowledge that, given the urgent need to find effective treatments for severe COVID-19 infections, providers will likely need to administer unproven treatments before results from clinical trials are available. To further assist with assessing the efficacy and safety of various treatments, the authors call for the collection of data from patients who receive these interventions outside the context of clinical trials. Ideally, such data would include detailed information about patient characteristics; the interventions administered; and the outcomes of the attempted treatments, including mortality, ICU length of stay, hospital length of stay, intubation rate, length of mechanical ventilation, need for long‐term oxygen therapy, and adverse events.
Continue reading “American Thoracic Society Releases Interim Guidance on Treatment of COVID-19, Including Discussion of Controversial Hydroxychloroquine Therapy”
Several states have taken measures to provide immunity from tort liability to health care providers and facilities aiding in the COVID-19 pandemic outbreak. On April 1, 2020, Illinois Governor J.B Pritzker issued an Executive Order in Response to COVID-19 (Executive Order 2020-19). This Order grants certain health care facilities, professionals, and volunteers immunity from civil liability when rendering assistance during the COVID-19 outbreak. As described below, the standards vary depending on whether the action was taken by a state facility or employee versus a private facility or employee or whether acting as a volunteer. Continue reading “Illinois Executive Order Limits Tort Liability for Health Care Facilities, Providers, and Volunteers”
The CARES Act (the “Act”), enacted on March 27, 2020, makes notable changes to federal law governing the disclosure of substance use disorder (“SUD”) records. The Act amends 42 U.S.C. 290dd-2, the governing statute of the regulations at 42 C.F.R. Part 2 (“Part 2”) to better align certain of its confidentiality requirements with HIPAA. The amendments do not change the basic premise that prior written consent of the patient is required for disclosure of SUD treatment records. However, once prior written consent of the patient is obtained, the amendments allow a covered entity, business associate, or Part 2 program to use or disclose SUD records for purposes of treatment, payment, and health care operations as permitted by HIPAA. Any information so disclosed may then be redisclosed in accordance with the HIPAA regulations. The amendments also allow a patient’s prior written consent to be given once for all such future uses or disclosures for purposes of treatment, payment, and health care operations, until the patient revokes his or her consent in writing. Continue reading “The CARES Act Amends Federal Law Governing the Confidentiality of Substance Use Disorder Patient Records”
In order to facilitate social distancing measures during the COVID-19 pandemic, state and federal regulatory agencies are moving quickly to permit providers to continue to provide medical care through telemedicine. On March 16, 2020, Alex Azar, the Secretary of Health and Human Services, has declared a public health emergency and, therefore, activated the telemedicine allowance under 21 U.S.C. § 802(54)(D). Per the Secretary, this applies to all schedule II-V controlled substances in all areas of the United States for as long as the public health emergency declaration is in place so long as the following conditions are met: (1) the prescription must be issued for a legitimate medical purpose by a practitioner acting within his or her usual course of professional practice; (2) the telemedicine communication must be carried out using an audio-visual, real-time, two-way interactive communication system, and (3) the practitioner must act in accordance with all applicable state and federal laws.
In Pennsylvania, Act 96 of 2018 provides exceptions to electronic prescription requirements “in an emergency situation pursuant to Federal or State law and regulations of the department.” Each state regulates the prescription of controlled substances differently and will respond to this ongoing emergency in a different way. Although many restrictions have been eased, providers are urged to ensure that they comply with all applicable laws and regulations when prescribing controlled substances.
There are several measures OCR/HHS has taken to lessen the regulatory burden of HIPAA for health care providers amidst COVID-19. Here is the latest breakdown of important pronouncements and guidance set forth by OCR/HHS to help providers deal with COVID-19 and HIPAA compliance:
Continue reading “OCR Loosens HIPAA Enforcement Amidst Coronavirus Pandemic”
OCR began investigating the solo practitioner after his medical practice (the “Practice”) filed a breach report with OCR related to the Practice’s dispute with its electronic health record (EHR) provider. The Practice’s breach report alleged that the EHR provider was blocking access to the Practice’s medical records, until the Practice paid the EHR provider $50,000.
Upon receipt of the breach report, OCR initiated a compliance review of the Practice and found that the Practice demonstrated significant noncompliance with the HIPAA rules. Specifically, the OCR investigation determined that the Practice had never conducted a risk analysis at the time of the breach report, and despite significant technical assistance throughout the investigation, had failed to complete an accurate and thorough risk analysis after the breach and failed to implement security measures sufficient to reduce risks and vulnerabilities to a reasonable and appropriate level.
In addition to the $100,000 settlement, the Practice entered into a Resolution Agreement with OCR and Corrective Action Plan.
OCR issued a press release regarding the settlement stating: “All health care providers, large and small, need to take their HIPAA obligations seriously,” said OCR Director Roger Severino. “The failure to implement basic HIPAA requirements, such as an accurate and thorough risk analysis and risk management plan, continues to be an unacceptable and disturbing trend within the health care industry.”
The take away “All health care providers, large and small, need to take their HIPAA obligations seriously,” and maybe the age old wisdom, people in glass houses should not throw stones.
A recent whistleblower case led to the filing of a false claims act complaint against Community Health Network (CHN) by the United States of America Department of Justice on January 7, 2020. The complaint, filed in the U.S. District Court for the Southern District of Indiana, alleges that CHN compensated providers significantly over fair market value (FMV) in order to roll up referrals from the provider’s practices in violation of the Stark Law, which prohibits a hospital from billing Medicare for services referred by a physician with whom the hospital has a financial relationship that does not meet any statutory or regulatory exception.
In its complaint, the government alleges that CHN had employment relationships with numerous physicians that did not meet any Stark Law exception, because the compensation paid to the providers by CHN was well above FMV. In addition to the excessive compensation allegation, the complaint alleges that CHN conditioned the physician’s incentive or bonus compensation based on the physician meeting a target of hospital downstream revenue specific to the physician.
According to the complaint, CHN wanted to tie physicians with existing business in lucrative specialties to CHN. A number of the recruited physicians already had medical staff privileges at CHN hospitals and were already referring patients to CHN hospitals. The government complaint states that the physician integration strategy was defensive in nature meaning that CHN recruited and employed the providers to secure their referrals and out of concern that referrals would otherwise leak to CHN’s competition.
The whistleblower provided information to the government suggesting that CHN knew the compensation exceeded FMV and had withheld details of the proposed compensation from FMV consultants in order to obtain a more favorable FMV analysis. The whistleblower also claimed to have documentation showing that CHN executives calculated the provider’s excessive compensation based on the value of expected referrals. The January 6, 2020 amended complaint claims that CHN ignored the consultant’s warnings that the proposed compensation was in excess of FMV.
While the Stark law strictly prohibits a hospital from paying a physician in excess of FMV, the calculation of FMV is subjective and influenced by a wide variety of factors. There can be good reasons for paying a physician in excess of what other doctors are paid. The rationale for paying a physician in excess of what other doctors are paid should be objective, legitimate and well documented.
Hospitals should obtain a FMV analysis of physician compensation arrangements, make sure that the valuator has the necessary information and understands any unique circumstances. Hospitals should consider obtaining the FMV analysis in draft form under attorney-client privilege, in case the valuator failed to consider a relevant factor and meet with the valuator to discuss the valuation, before the analysis is finalized. Finally, it is imperative that hospitals consult with legal counsel throughout the valuation process to assure compliance with legal and regulatory requirements.
