Tag: legislation

Combatting the Opioid Crisis

By Andy Cole, Class of 2018

Florida Governor Rick Scott announced on September 26, 2017, plans to introduce legislation that would limit opioid prescriptions to only three days unless a set of very strict standards are met. If the standards are met, then a seven day supply would be permitted. Currently, this bill has not been filed in the House or Senate, but a similar seven day limit bill has been filed.
This legislation follows President Donald Trump declaring the opioid epidemic as a national emergency and many other states and pharmaceutical retailers taking similar stances. Less than a week before Gov. Scott’s announcement, pharmaceutical retailer CVS announced that beginning next February it will limit opioid prescriptions to seven days for patients who are new to pain therapy. Additionally, the Pharmaceutical Research and Manufacturers of America has announced its support for a seven day limit on opioid prescriptions with exceptions for certain conditions such as cancer.
It is unclear if this legislation will pass as it is currently planned. If so, it will be the strictest opioid limitations in the country. Many states have passed seven day limits for first time opioid patients.
In Massachusetts, Governor Charlie Baker proposed a similar 72 hour limit on opioids for first time users. This proposal was met with much criticism from many doctors and advocacy groups who called the proposal “draconian.” The final product of the bill had overwhelming support from both parties. Baker, a Republican, signed the final bill after it passed unanimously through the Democrat controlled legislature.
Many state legislatures have found it hard to balance the need for doctors to maintain discretion and to curb a national crisis. Many doctors and organizations are calling for tighter restrictions that prevent overprescribing of opioids to patients who do not need the medication.
Dr. Steven Stanos, president of American Academy of Pain Medicine, said the academy “supports any initiative that would help limit the effects of over prescribing medications or leading to excessive unused medicines that could lead to harm to a patient or family members or their community.”
The trend of states seeking to regulate the amounts of opioids doctors are allowed to prescribe will continue to grow until the epidemic can be helmed. As many states look to begin drafting their legislative initiatives for 2018 and many politicians prepare for midterm elections, combating opioid addictions will undoubtedly be a bipartisan effort.
There is a possibility that many states will push for law similar to the law enacted in Massachusetts, which requires practitioners to take more steps to combat opioid misuse. The first point of the law is to limit opioid prescriptions to seven days for any new opioid prescription. This applies to all opiates Schedule II through Schedule VI. There are exceptions to this limit. Physicians can prescribe for more than seven days if the prescription is designed for the treatment of substance use disorder or opioid dependence, for inpatient prescriptions, for pain related to an acute medical condition, for chronic pain management, for pain associated with a cancer diagnoses, or for palliative care.
If a first time opiate prescription is being written for greater than a seven-day supply pursuant to an exception, the prescriber must document in the medical record the specific exception for which the opiate is being prescribed; and provide brief information about the actual condition or treatment that necessitates more than seven days; and indicate whether there were known and available non-opiate alternatives. The state has added an additional requirement for prescribing opioids to minors under the age of eighteen. For minors, the prescriber must also document that there was a discussion with the parent/guardian of the known risks with the specific prescription and why it is necessary for that condition/treatment. Additionally, prescribers must document in the medical record each and every time an outpatient opioid prescription is being issued to anyone.
This law moves beyond the prescription limit and also requires prescribers to check the Prescription Monitoring Program every time he or she schedules a Schedule II or III narcotic. The law also requires prescribers to complete training in pain management and addiction. In addition, it requires prescribers and patients to enter into a written pain management treatment agreement for prescriptions for extended-release long-acting opioids.
Finally, this law also places a new burden on pharmacists. If a patient requests a partially filled opioid prescription, the pharmacist must notify the prescriber within seven days. Then the prescriber is responsible for discussing with the patient the quantity of the prescription and the option to partial fill.
From an attorney’s point of view, it is important to make sure your client is aware of all of these changes and their new obligations under the law. While Tennessee has not enacted this type of law yet, combatting the opioid crisis in the state will be high on the legislative agenda for the next few years. A piece of legislation similar to this is bound to be at least be discussed by lawmakers as a potential route to take. At the moment it is difficult to tell how difficult it will be to monitor providers who may abuse the system.

The Trump Administration Shores Up Health Insurance Marketplace Pending Possible ACA Repeal

By Will Blackford, Class of 2017

Recently, the Trump administration put forth two key initiatives to ease the burden of the Affordable Care Act (“ACA”) and to stabilize the Obamacare marketplace.

First, the Internal Revenue Service (“IRS”) quietly updated its website with a statement indicating that the agency will not reject 2016 tax filings that fail to indicate whether a taxpayer complied with the ACA’s individual mandate. Second, the Centers for Medicare & Medicaid Services (“CMS”), now overseen by Tom Price, the new Secretary of the Department of Health and Human Services, submitted a new proposed rule aimed at making health insurer plans under the Obamacare exchange more profitable.

Both changes come on the cusp of significant insurer uncertainty, with Humana announcing its departure from the exchange market in 2018, and other insurers—such as Aetna and Anthem—threatening to cease future participation in the absence of meaningful modifications to the system.

 

New IRS Individual Mandate Policy

Following the signing of an executive order by President Trump on Jan. 20, 2017, which directed federal agencies to reduce the burden of the ACA, the IRS retreated from its previous policy that would have required an indication of health insurance coverage on tax returns. The system the IRS initially developed would have automatically rejected tax returns that failed to indicate whether the individual maintained health insurance, allowing the agency to efficiently enforce the ACA’s assessment of a penalty on those lacking coverage.

Under the newly announced policy, this mechanism for handling so-called “silent returns” will not be implemented. Instead, the IRS will continue to accept and process electronic and paper returns, even in the absence of an indication of coverage status. However, the IRS will still be enforcing the individual mandate if people volunteer on their 1040s that they lacked health coverage in 2016. While the agency reserves the right request additional information from individuals that file “silent returns,” the policy shift will undeniably lead to a lesser degree of enforcement under the mandate.

 

CMS Market Stabilization Proposed Rule

As Congress continues its debate over repealing, repairing, or replacing the ACA, a recent CMS notice of proposed rulemaking (“NPRM”) is intended to calm insurer anxieties over the long-term viability of the health insurance exchange. The NPRM offers numerous policy and operational tweaks geared toward stabilizing the marketplace, including:

  • Shortened 2018 Open Enrollment Period. The NPRM would reduce the open enrollment period for 2018 to 45 days (November 1 to December 15, 2017). This would allow insurers to collect a full year’s premium for 2018 from regular enrollees and limit adverse selection by those individuals who discover health issues during the months of December and January.
  • Special Enrollment Periods. The NPRM would target special enrollment periods (“SEP”) by tightening up eligibility, restricting the upgrade ability of existing marketplace enrollees, and limiting overall use of the “exceptional circumstances” SEP.
  • New Guaranteed Availability Requirement Interpretation. To address insurer concerns over potential abuses, the NPRM would add flexibility to the guaranteed availability requirement for allowing an issuer to collect premiums for prior unpaid coverage before enrolling a patient in the next year’s plan with the same issuer. This is meant to incentivize patients to avoid coverage lapses.
  • Reduced Essential Community Providers Requirement. The NPRM proposes that for 2018, plans be required to include only 20 percent of Essential Community Providers (e.g., community health centers, family planning clinics, safety-net hospitals) within their network, rather than the current requirement of at least 30 percent.
  • Network Adequacy Delegated to States. Starting with the 2018 plan year, CMS proposes deferring to the state regulators to ensure network adequacy, provided that the state has adequate authority and resources to ensure reasonable access to providers.

Unlike the traditional 30-day minimum for feedback, the NPRM has an unusually short comment period—only 20 days—for CMS to consider public comments prior to issuing a final rule. This expedited timeframe is intended to accommodate insurers who are frantically working to finalize their forms and rates for 2018.

SAMHSA Final Rule Updates the 42 C.F.R. Part 2 Substance Abuse Confidentiality Requirements

By Will Blackford, Class of 2017

After four decades of anticipation, the Substance Abuse and Mental Health Service Administration (“SAMHSA”) published on January 18 a Final Rule modernizing the laws governing how providers share data about individuals with a substance use disorder (“SUD”). The affected regulations, known as 42 C.F.R. Part 2 (“Part 2”), were updated to meet the demands of the electronic age. The Final Rule is meant to facilitate broader data delivery and electronic exchange while safeguarding the privacy of the patient information.

Revisions to Part 2 under the Final Rule include:

  • Consent. Rather than requiring the identification of a specific information recipient, patients are now allowed, in certain circumstances, to consent to a “general disclosure” to intermediate entities (e.g., “my current and future treating providers”).
  • Disclosure. Any patient who opts for this general designation consent may request in writing (paper or electronic) a list of entities to which their information has been disclosed (“List of Disclosures”), and the disclosing entity named on the general consent form must respond within 30 days with a brief description of each disclosure made within the past two years.
  • Description. All patient consent forms are required to include an explicit description of the amount and kind of information that may be disclosed.
  • Scope. The applicability of restrictions on disclosures under Part 2 is expanded to include individuals or entities receiving patient records from “other lawful holders of patient identifying information.”
  • Security. Part 2’s security requirements now apply to both electronic and paper records, as well as require Part 2 programs and “other lawful holders” to have formal security policies and procedures in place.
  • Exclusions. Simply providing screening, brief intervention, or referral to treatment, within the scope of general healthcare, does not subject a provider to classification as a Part 2 program.
  • Qualified Service Organizations. The definition of a Qualified Service Organization (“QSO”) is expanded to include an entity that provides population health management (“PHM”) services to a Part 2 program; however, disclosures under QSO agreements are limited to specific offices or units that actually carry out PHM and such agreements may not be used to circumvent patient consent.
  • Re-disclosure. As a clarification, the prohibition on re-disclosure under Part 2 now applies only to information that would identify a patient as having been diagnosed, treated, or referred for a SUD, unless the patient expressly authorizes such disclosure.
  • Other Disclosures. The Final Rule also relaxes requirements in specific areas, such as disclosure without consent for certain scientific research, medical emergencies, and audits or evaluations.
  • Payment and Operations Disclosures. Due to commenter concerns, SAMHSA issued, alongside the Final Rule, a Supplemental Notice of Proposed Rulemaking (“SNPRM”) to seek comment on disclosures to contractors for payment and operations facilitations, as well as disclosures for Medicare, Medicaid, and other federal program audits or evaluations.

 

Although the Final Rule was scheduled to go into effect on February 17, 2017, President Trump’s 60-day hold on all rules published in the Federal Register that are not yet effective will likely delay the effective date until at least March 21, 2017. But even with the delay, those providers subject to Part 2 have a very limited timeframe to thoroughly review the new provisions and implement necessary changes.

Specifically, Part 2 providers should implement or update security procedures to address both paper and electronic records. Security measures should also clarify internal policies for creating, maintaining, transferring, destroying, and de-identifying such records. Should providers choose to utilize the new general designation consents for disclosures, there will need to be adequate recordkeeping processes in place to ensure compliance with any List of Disclosure requests. Additionally, providers working with QSO vendors should review relevant contractual documentation to confirm that such vendors are correctly categorized as a QSO under the new definition.

Stay tuned as we continue to monitor the implementation of this Final Rule and analyze its legal consequences.

Proposed Telehealth Bill

By Ann Hogan, Class of 2018

After years of debate, on Wednesday, March 29, 2017, the Texas Senate unanimously passed Bill 1107, legalizing telehealth and telemedicine in the state of Texas and is to take effect immediately. Telemedicine is a health care service delivered by a licensed physician or health professional to a patient at a different physical location than the physician or health professional using telecommunications or information technology.

Bill 1107 removes the requirement of a face-to-face consultation between a patient and physician providing a telemedicine medical service within a certain number of days following an initial telemedicine service in order to create the physician-patient relationship. Now, a physician-patient relationship can be created through telephone or video.

Bill 1107 delegates the authority for the Texas Medical Board to create rules to effectuate appropriate quality care, the prevention of fraud and abuse, and the supervision of the healthcare professionals. It also requires the physician to comply with the standard of care that would apply to the provision of the same health care service or procedure in an in-person setting. Mental health services are excluded from this provision. Also noteworthy, physicians are not permitted to prescribe an abortifacient or any other drug or device that terminates a pregnancy through telemedicine.

The passing of this bill will likely have a significant effect for rural provider areas. For Texans who live in rural areas, telemedicine will allow them to seek care from providers via phone or video and have prescriptions called in to their local pharmacy. This will increase the efficiency of health care for Texans and save them time and money.

Increased Price Transparency

By Zachary Gureasko, Class of 2017

On President Donald Trump’s website, one of his objectives is: “Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals. Individuals should be able to shop to find the best prices for procedures, exams or any other medical-related procedure.” President Trump believes that by allowing the individual to “shop around” for the best prices, competition among providers will increase and they will be forced to lower costs.

There are some organizations that already attempt to use existing data to provide consumers with cost estimates that they can use to make cost-informed choices. One such organization is FAIR Health, which is an independent, non-profit corporation whose mission is to promote cost transparency in healthcare costs. Using the website highlights some discrepancies in costs that would be helpful to consumers. For example, a procedure done in Nashville proper priced at $5,000 could potentially cost as low as half of that amount if it was performed more than 45 miles away from Nashville.

The health care industry has long been viewed as “hiding the ball,” so to speak, when it comes to the full prices of their services. Generally, the only information they offer before the patient elects to undergo a procedure or treatment is the immediate cost, such as a co-payment or deductible. Arguments have been made, even prior to President Trump’s call for increased transparency, for the provision of total costs to the consumer. The justification for this is that consumers with more information will be able to comparison shop and obtain the desired care for a relatively affordable price.

There are issues with price transparency from both provider and consumer perspectives. There are impediments to price reporting, such as contractual provisions preventing health plans from negotiating their rates with providers, as well as the indication that encouraging patients to be more price-conscious could have negative impacts on low-income consumers due to cost-shifting. Additionally, there is currently no standard structure for reporting prices, and the interplay between health care providers, insurance companies, and government agencies almost require some sort of formatted structure to be in place to enable providers to adequately report in a way that would achieve the intended result of these price transparency efforts.

Several studies have also shown that price transparency initiatives, such as requiring hospitals to publish the prices of their procedures and treatments up-front, do not truly lead to changes in either consumer behavior or pricing. This result is potentially attributable to a perceived correlation between high cost and high value, one that is not necessarily accurate in the health care industry as it might be in other industries. Another wrinkle in the fold from a consumer perspective is the notion that consumers will use price transparency tools in their decision-making. However, many consumers are unaware that such tools exist; moreover, even if they are aware of the tools’ existence, research has shown that this has little to no bearing on the consumers’ ultimate decisions or determinations.

As a final consideration, although efforts to increase price transparency are still in their early stages (and thus there is not enough data to form a fully conclusive study on their impact), not all health care services are amenable to “shopping around.” For instance, a person in an emergent situation will not be on his or her smartphone comparing the prices of different ERs. The person will assuredly utilize the nearest hospital with an emergency room. Emergency room services comprise a fairly substantial portion of health care costs. Therefore, it remains to be seen whether increased price transparency will truly increase competition or lower health care costs for consumers.

 

Selling Health Insurance Across State Lines—A Summary

By Kim Macdonald, Class of 2018

Selling Health Insurance Across State Lines—A Summary

Currently, health insurers are restricted to each state for purposes of regulation. One primary health reform proposal is to allow insurers to sell health insurance to out-of-state markets. Proponents argue that removing the state line restrictions will encourage competition, increase consumer choice, and, therefore, offer national plans with much lower premiums as determined by the market. By providing people with more options, in theory, consumers can choose the plans that provide only the benefits they need without paying for superfluous benefits.  Critics argue that allowing interstate sales of insurance will instead provide a mechanism for insurers to choose their regulator, sparking a “race to the bottom” for the states with the least restrictive regulations. In turn, removing the barriers to selling health insurance across state lines may encourage states to have less restrictive regulations to attract health insurance companies.  Removing these restrictions would likely benefit the young, healthy policy holders, resulting in lower premiums because they do not rely on regulations to cover their needs. By contrast, fewer regulations could harm older and sicker policy holders who depend on the coverage restrictions to qualify for sufficiently robust policies.

Additionally, critics argue interstate sales of health insurance would decrease the availability of policies per state, since insurers have to compete on a national market rather than a regional or state-wide market. Some critics are concerned the proposal undercuts states’ role in regulating insurance, which, counterintuitively, may increase the necessity of the federal government to further regulate the market to ensure basic minimum standards.

Insurers would also have to grapple with the difficulty of setting up a network of providers and entities without being in-state.  Insurance costs reflect the general health of an area’s population. Therefore, while one policy may be affordable in one state due to its robust network of providers, lower cost of living, and overall health of the population, the exact same policy may not translate financially across state borders. Insurers face difficulties with selling “healthy state” plans to sicker populations in other states.

ACA- Benefits and Risks

By Zachary Gureasko, Class of 2017

The future of the health care industry is as uncertain as ever, pending the potential repeal (and hopefully subsequent replacement) of the Patient Protection and Affordable Care Act (“ACA”), colloquially known as “Obamacare.”

On January 20, 2017, President Donald J. Trump signed an executive order titled “Executive Order Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal.” This particular order directed federal agencies to reduce enforcements of the ACA’s requirements, subject to two limits: any reductions in the enforcement of the ACA’s provisions must be consistent with the law itself, and the change must comply with “notice and comment rule making” requirements (should the law so require). Although these are significant limitations on the order, they indicate a willingness to repeal the ACA as soon as possible and practicable. As of the date of this post, proponents of the repeal of the ACA have not tabled a viable alternative to replace the Act. They have also not designated which provisions of the Act they intend to keep, if any, although President Trump has indicated that he wishes to keep in place the prohibition on denying coverage to individuals with preexisting conditions. There are some notable risks and benefits to this prospective repeal.

One of the notable benefits is for branded pharmaceutical companies due to the bidding processes that may take place in the event of the ACA’s repeal. Although 90% of the prescription drugs in this country are generic, and therefore there is significant market control over the prescription drug industry, pharmaceutical companies have been able to needlessly increase the prices of brand-name prescription drugs. These participants, who have often increased prices for products that do not provide significant value to the consumer, will most likely suffer. Unlike generic drug companies, brand-name drug companies are subject to the industry fees imposed by the ACA. Any cost reduction realized by the elimination of these fees will be counterbalanced by substantial revenue erosion. This will pave the way for other players in the brand-name drug industry to emerge, establishing a more competitive market that will hopefully drive up value while lowering costs. President Trump has stated that it is one of his express goals to remove barriers to entry into free markets for drug providers.

Pharmaceutical and biotech companies could also realize greater revenues if the Branded Prescription Drug Fee that levies taxes on drug-makers in proportion with their market share is eliminated by repealing the ACA. Companies’ bottom lines could be benefitted even further if Trump’s tax plan succeeds, thereby decreasing business tax rates, allowing larger companies to keep more of the money they earn. Deregulation is also integral to President Trump’s long-term plan for the healthcare industry. Stocks have reportedly increased for pharmaceutical and biotech companies since President Trump’s election and inauguration.

In contrast, the risks for providers and payers are significant if the ACA is repealed completely. Without a replacement, repealing the ACA would, in the first year, cause 18 million individuals who are currently insured to lose coverage. An increase in the number of uninsured individuals will have an exceptionally negative impact on providers, as an increase in the number of uninsured correlates with a provider’s inability to collect payments from the uninsured, increasing the provider’s “bad debt.” A greater number of uninsured necessarily implies higher premiums, deductibles, and cost-sharing for those who are still insured, meaning that Medicare and other third-party payers will have to pass these costs on to consumers that are still enrolled. This will lead to a decline in Medicaid enrollment, as the historically poor and categorically needy will be unable to afford these increased costs. Private insurers could potentially benefit, since they have not experienced the increased enrollment that was anticipated under the ACA’s individual mandate. The simple fact is that repealing the ACA without a viable alternative will leave millions uninsured, and the ones losing coverage are not the ones who will feel the first, strongest financial effects. Providers and payers will experience increased costs and bad debts, and this is undesirable in an era where the focus of the industry is moving toward value-based measures.

As time goes on, it appears that the ultimate goal of ACA’s many detractors is truly to replace and reform (or “repair”) the Act rather than repeal it entirely, but the future is uncertain, for better or for worse, for all those involved in the health care industry.