Dear Health Law Section Members:
The Section website has been updated with articles on significant developments in the health law arena that may be of interest to you in your practice. These summaries are presented to Section members for general information only and do not constitute legal advice from The Florida Bar or its Health Law Section. HLS thanks the following volunteers who have generously donated their time to prepare these summaries for our members:
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Christian Pérez Font, Esq
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Rodney Johnson, Esq.
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Shantal L. Henriquez, Esq.
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Elizabeth Scarola, Esq.
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Erica C. Mallon, Esq.
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Rodney Johnson
Thank you,
Malinda Lugo, Esq.
Kimberly Sullivan, Esq.
Fraud and Abuse
Owner of Florida Pharmacy pleads Guilty in $100MM Compounding Pharmacy Scheme
On November 6th, 2017, the Department of Justice announced that the president and owner of Florida-based A to Z Pharmacy had plead guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to engage in monetary transactions involving criminally derived property as part of a large scheme to defraud private insurance companies, Medicare and Tricare. According to the admissions made as part of the plea agreement, the defendant caused the submission of fraudulent reimbursement claims for prescription compounded medications by using billing codes that included ingredients that were never used. The defendant and his seven co-conspirators also admitted to paying kickbacks and bribes in exchange for prescriptions and patient identifying information used to further the scheme. Sentencing will be scheduled before U.S. District Judge James S. Moody Jr of the Middle District of Florida.
A copy of the Department of Justice’s press release in this case is available at: https://www.justice.gov/opa/pr/owner-florida-pharmacy-pleads-guilty-100-million-compounding-pharmacy-fraud-scheme-real.
Reported by: Christian Pérez Font, Esq
Competitors Can be Whistleblowers Too
On August 18, 2017 the Department of Justice announced that pharmaceutical giant Mylan had agreed to pay $465MM to resolve claims that it violated the False Claims Act by knowingly misclassifying its EpiPen as a generic drug despite the absence of any therapeutically equivalent drugs. This misclassification allowed Mylan to demand massive price increases in the private market (around 400% between 2010 and 2016) while avoiding the payment of rebates to the Medicaid program. Aside from the magnitude of the settlement itself, it is notable that the whistleblower in this case was not an individual but rather Sanofi Aventis, a competitor, who received $ 38.7MM as its share of the total settlement. This is yet another example, that strong healthcare fraud and abuse enforcement is here to stay.
A copy of the settlement agreement is available at the Department of Justice’s website at https://www.justice.gov/opa/press-release/file/990736/download.
Reported by: Christian Pérez Font, Esq
Life Sciences
Update on Medical Marijuana
In June, the Florida Legislature codified the laws implementing Amendment 2 (Fla. Const. Art. X, § 29), which expands the licensure, sale, use, etc. of medical marijuana in Florida. The implementing regulations created the Office of Medical Marijuana Use within the Florida Department of Health, which is charged with overseeing the writing and implementation of the rules, licensing businesses and physicians to grow, dispense, and “order” medical marijuana, as well as issuing licenses for patient use. The law, codified at F.S. § 381.986 et seq. allows for the licensure of 10 additional growers to the already seven licenses in existence. It also provides for the opening of an initial 25 dispensaries. The law sets into place specific provisions regarding how counties and municipalities can regulate dispensaries: (1) regulate like retail pharmacies, (2) ban from opening altogether, or (3) issue a temporary moratorium on opening dispensaries. As a result of these options, many local governments have banned or put into place moratoriums on the opening of dispensaries in cities and counties throughout the state, many of which are in effect until early 2018. The law also requires the medical marijuana to be tested by certified testing laboratories before being dispensed to users. In addition, the law sets forth the prohibitions regarding the financial interests between ordering physicians, testing laboratories, and dispensaries.
Reported by: Shantal L. Henriquez, Esq.
DISCLAIMER: The views expressed herein do not represent the views of the Social Security Administration or the United States Government. They are solely the views of Shantal L. Henriquez, in my personal capacity or as representative of The Florida Bar Health Law Section. I am not acting as an agent or representative of the Social Security Administration or the United States Government in this activity. There is no expressed or implied endorsement of views or activities of The Florida Bar Health Law Section by either the Social Security Administration or the United States.Third Party Payors
CMS Innovation Center Requests Stakeholder Input
On September 20, 2017, the Centers of Medicare and Medicaid Services (CMS) issued a Request for Information soliciting stakeholder with regards to innovative programs it could offer to improve quality, reduce costs, and improve outcomes. The RFI states requests suggestions in the following eight focus areas: (i) increased participation in Advanced Alternative Payment Models; (ii) consumer-directed care and market-based innovation models; (iii) physician specialty models; (iv) prescription drug models; (v) Medicare Advantage Innovation Models; (vi) state based and local innovation, including Medicaid models; (vii) Mental and Behavioral Health Models and (viii) Program Integrity.
The RFI was released just a month after CMS proposed changes to the Comprehensive Care for Joint Replacement Model, cancellation of the mandatory episode payment models and cardiac rehabilitation incentive payment model.
CMS Administrator Seema Verma explained, “Stakeholders have asked for more input on the design of [Innovation Center] models. These changes make this possible and give CMS maximum flexibility to test other episode-based models that will bring about innovation and provide better care for Medicare beneficiaries.”
Interested stakeholders can submit comments online or e-mail them to CMMI_NewDirection@cms.hhs.gov through November 20, 2017.
Reported by: Elizabeth Scarola, Esq.
CMS Cancels Two Bundled Payment Models & Announces More Voluntary Bundles
On November 30, 2017, the Centers for Medicare and Medicaid Services (“CMS”) canceled mandatory hip fracture and cardiac bundled payment models and implemented changes to the Comprehensive Care for Joint Replacement (“CJR”) model.
The number of mandatory geographic areas participating in CJR has been reduced from sixty-seven (67) to thirty-four (34) areas. CMS is also making participation in the CJR model voluntary for all low volume and rural hospitals within the 34 mandatory geographic areas.
In the CMS announcement, CMS Administrator, Seema Verma indicated that CMS would be announcing new voluntary payment bundles in the future. Ms. Verma stated, “[w]hile CMS continues to believe that bundled payment models offer opportunities to improve quality and care coordination while lowering spending, [CMS] believe[s] that focusing on developing different bundled payment models and engaging more providers is the best way to drive health system change while minimizing burden and maintaining access to care.”
Reported by: Elizabeth A. Scarola, Esq.
CMS Proposes Next Generation Sequencing Coverage for Medicare Beneficiaries with Advanced Cancer
Last month, the U.S. Food and Drug Administration (“FDA”) approved the FoundationOne CDx, a next generation sequencing device (“F1CDx™”). Shortly after announcing FDA approval, CMS received a formal request (See: https://www.cms.gov/Medicare/Coverage/DeterminationProcess/downloads/id290.pdf) to establish coverage for comprehensive genomic profile testing for the management of cancer patients with solid, metastatic tumors (including Stage IV and recurrent turmors) with F1CDx™.
Next generation sequencing provides detailed information on multiple types of genetic alternations simultaneously, providing a more comprehensive genetic profile of cancer and information relevant to potential cancer treatments. Providers and patients believe the technology holds potential for personalized cancer therapy.
CMS is soliciting public comment relevant to the request through December 29, 2017.
Reported by: Elizabeth A. Scarola, Esq.
Health Care Transactions
Update on Healthcare Transactions
The business of providing health care has shifted dramatically in recent years, and continues to transform at a rapid pace. As companies face uncertain impacts of health care reform (or potentially an unwind of existing health care reform), a tumultuous political climate, and potential reimbursement cuts, large players in one healthcare industry have been entering the market in other healthcare industries.
Two recent transactions that have garnered significant attention are the $69 billion CVS-Aetna deal and the $4.9 billion UnitedHealth Group-DaVita Medical Group deal. The CVS-Aetna transaction combines a pharmacy, benefits manager, insurer, and retailer with more than 1,000 walk-in clinics across 33 states into one entity. The UnitedHealth-DaVita transaction brings UnitedHealth deeper into the delivery of medical care as it acquires dialysis giant DaVita’s primary care division entity, which operates nearly 300 clinics across six states.
Health insurers believe that they can cut medical costs by playing a more direct role in the delivery of medical care, shifting patients to cheaper, more accessible locations for routine, non-life-threatening medical care, potentially at facilities that they themselves own.
It is anticipated that even more innovative transactions and strategic affiliations will take place as non-traditional players like Amazon enter the healthcare market. Existing players are scrambling to compete and maintain market share when new companies develop inventive offerings and relationships.
Reported by: Erica C. Mallon, Esq.
Public Health
The Aftermath of the Hurricane: Emergency Preparedness Rules
CMS’ 2016 final Emergency Preparedness Rule requires Medicare and Medicaid participating providers and suppliers to plan for natural and man-made disasters in collaboration with federal, state, regional and local emergency preparedness organizations. Participating providers must conduct a risk assessment, develop an emergency plan, implement policies and procedures, communicate the plan, develop training and testing programs and update the plan annually. Providers should revisit the final rule and their existing emergency preparation plans to ensure compliance, as the rule takes effect November of this year.
In light of Hurricane Irma and the related nursing home deaths, Florida Governor Rick Scott enacted a Florida emergency rule related to emergency operations of assisted living facilities six days after the storm. The Emergency Rule requires nursing homes and assisted living facilities to maintain generators to run air conditioners in the event of a loss of power.
On September 27, 2017, the Emergency Rule was challenged by LeadingAgeFlorida, an organization that represents more than one hundred nursing homes and assisted living facilities. LeadingAgeFlorida argues that it is unrealistic to expect facilities throughout the state to install generators within sixty days, as the Emergency Rule required.
Reported by: Elizabeth Scarola, Esq.
Youth Sports Concussion Laws
A recent study published by the American Journal of Public Health looking at youth sports concussion laws passed between 2009 and 2014 found that the laws have led to a “significant decline” in repeated concussions among young athletes. To-date, these laws have been passed in all 50 states and the District of Columbia. The Network’s resource on youth sports concussion laws outlines specific aspects of the laws, including which states require return-to-play protocols for student athletes, which type of provider can issue a return-to-play clearance, and whether or not the law applies to recreational sports.
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Reported by: Rodney Johnson
2018 Public Health Law Conference: Save-the-Date and Call for Abstracts
The Network and ASLME are excited to announce the 2018 Public Health Law Conference will take place October 4 – 6 in Phoenix, Arizona. We are now accepting abstracts for proposed panels and individual presentations. We encourage submission of abstracts related to this year’s Conference theme, Health Justice: Empowering Public Health and Advancing Health Equity, as well as abstracts on other timely public health law topics. Deadline for abstract submission is December 15, 2017.
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Reported by: Rodney Johnson