Amy Zink, Class of 2021, Belmont Law

On May 10, 2019, the Department of Health and Human Services (“HHS”) finalized a rule called the “WAC Disclosure Rule” that would require the disclosure of drug prices in direct-to-consumer television advertisements of drugs covered by Medicaid and Medicare. This rule was first pushed by President Trump’s Administration as one way to better regulate the high prices of prescription drugs within the U.S. HHS adopted the rule over numerous objections by pharmaceutical companies across the United States. Pharmaceutical companies’ chief complaints were that the HHS lacked the authority to promulgate this rule under the Social Security Act and that the inclusion of the price of the drug in advertisements would only increase the likelihood of misleading and confusing consumers.

Judge Amit P. Mehta, of the United States District Court in the District of Columbia, first noted that HHS did not have the express grant of authority to regulate under the Social Security Act. Therefore, Judge Mehta completed further analysis of the question to determine whether HHS had the implicit authority to regulate by Congress. By reviewing the statutory text, Judge Mehta determined that the power Congress gave to the Secretary of HHS was to establish rules and regulations for “running” or “managing” the federal public health insurance programs through CMS. However, the rule that HHS promulgated here was meant to regulate the conduct of market actors that are not direct participants in the Medicare or Medicaid programs.  Therefore, because the statutory text does not allow HHS to directly regulate the health care market itself or market actors that are not direct participants in the insurance programs, Judge Mehta concluded that HHS exceeded its authority under the Social Security Act by promulgating the “WAC Disclosure Rule” at issue here. This holding effectively blocks the HHS rule from taking effect in the United States.

Works Cited:

Merck & Co., Inc, et al. v. U.S. Dept of Health and Human Services, 385 F. Supp. 3d 81 (2019)

Judge Blocks Trump Rule Requiring Drug Companies to List Prices in TV Ads

Jessica Scott, Class of 2021, Belmont Law

The current coronavirus pandemic has overwhelmed numerous countries’ healthcare systems, including China and Italy who are unable to help all the patients that walk through the hospital doors in critical condition as a result of the coronavirus. As physical hospital locations in China are full and overflowing with patients, some telehealth services, including Ali Health, JD Health, and WeDoctor, have come forward to help coronavirus patients at home. These companies have helped aid in at home screenings and patient care while allowing most patients to stay put and avoid going out and spreading the virus.

In the midst of this pandemic, the United States passed the Coronavirus Preparedness and Response Supplemental Appropriate Act (“Act”) which waived certain Medicare requirements for telemedicine, making access more readily available to those on Medicare. The federal government is considering passing a bill to stimulate the economy that could potentially provide $1 trillion dollars to various sources. This bill contains support for telemedicine to help aid patients with coronavirus and includes proposals to relax tax rules for telehealth services in order to help keep patients out of hospitals and doctors’ offices and avoid overcrowding. On March 23, Congress democrats blocked the bill and as of right now (March 24) are renegotiating the terms.

The federal government is trying to use telemedicine to help ensure that everyone has access to healthcare in the midst of this epidemic. While this may seem temporary, this could be the stimulus that telemedicine needs in order to be readily accessible to patients long term. The Act that has already been passed will allow Medicare patients access to healthcare in their own home, and the potential bill may help fund the need for those patients and many more.

Anthony Huber, Belmont Law, Class of 2021

Last week, on February 28, in the case Willeford v. Klepper, the Tennessee Supreme Court (“Court”) found that a statutory provision in Tennessee Code Annotated section 29-26-121(f) violated the separation of powers clause in the Tennessee Constitution. The provision struck down by the Court allowed defense counsel to conduct ex parte interviews with patients’ non-party treating healthcare providers during the course of discovery in a healthcare liability lawsuit.

Section (f)(1) of the statute provided:

Upon the filing of any “healthcare liability action,” . . . the named defendant or defendants may petition the court for a qualified protective order allowing the defendant or defendants and their attorneys the right to obtain protected health information during interviews, outside the presence of claimant or claimant’s counsel, with the relevant patient’s treating “healthcare providers,” . . . .  Such petition shall be granted under the following conditions[.]

(Emphasis added.)  The plaintiff in the case argued that the statutory provision was unconstitutional because it deprived trial courts of their inherent authority over court proceedings.  In effect, the provision mandated that trial courts must issue qualified protective orders to allow defendants to conduct ex parte interviews with claimants’ treating healthcare providers.

The Court reasoned that legislative enactment which removes the discretion of a trial judge to make determinations of logical or legal relevancy “impairs the independent operation of the judicial branch of government.”  The Court reasoned that a trial court’s discretion to grant or deny discovery requests goes straight to the heart of the judicial function.  The Court concluded that the provision, as constructed, violated the separation of powers clause of the Tennessee Constitution because it divested trial courts of their inherent discretion over discovery.

However, the court noted that the overriding purpose of the statute was within the purview of the legislature and a small portion of the statute could be elided to keep with the expressed intent of the legislature.  The Court determined that the phrase “[s]uch petition shall be granted under the following conditions” could be elided to make the provision permissive rather than mandatory on trial courts.

While the effect of this opinion remains to be determined in practice, we now know that a trial judge will have discretion over whether he/she should grant a Qualified Protective Order (“QPO”) in a case.  Perhaps trial judges will be reluctant to grant QPO’s – perhaps not.  After this decision, we will not have to wait long to find out.

Opinion:          http://www.tsc.state.tn.us/sites/default/files/willeford.rhonda.opn_.pdf

Jessica Scott, Belmont Law, Class of 2021

Pharmacies try to do their part during the opioid crisis to track data of patients’ usage and find those who are at-risk. Technology is a huge part of helping pharmacists track down those who are at risk for substance misuse or abuse. Appriss Health created NarxCare, an analytic system that helps pharmacists quickly identify at risk patients. NarxCare was integrated into Walmart and Sam’s Club pharmacies, towards the end of 2018 and Rite Aid recently integrated NarxCare directly into their analytics.

NarxCare goes beyond tracking patients’ usage and prescription history but gives an objective insight into who may be an at-risk patient for substance misuse and abuse. NarxCare provides what is known as a Narx Report, the report includes a patient’s NarxScores, Predictive Risk Scores, Red Flags, Rx Graph, and State Prescription Drug Monitoring Programs (PDMP). The NarxScore are a quantified representation of the data in the PDMP ranging from 000-999, the higher the number the more likely one is to be at risk for misuse or abuse. The NarxScores take multiple factors into consideration including the number of prescribers, morphine milligram equivalents, pharmacies, and overlapping prescriptions.  If Red Flags appear in a patient’s profile, then that patient could be at risk of an unintentional overdose or other adverse events.

While most pharmacists already have access to PDMP information, NarxCare has gone a step further to make the information easier for pharmacists to analyze and keep them from overlooking potential at risk patients. NarxCare may become an essential tool for pharmacists to “identify potential problems up front, in real-time, for every customer, every time they consider a controlled substance dispensation.”

NarxCare is a step in the right direction for keeping those from taking advantage of their local pharmacies to gain access to Opioids and other controlled substances. Some find that NarxCare gives pharmacists access to more patient information than needed, the main problem is not the abuse of the pharmacies to access Opioids, and the focus should be those who are purchasing drugs illegally. However, NarxCare could be the much needed step in preventing those from misuse and abuse of the pharmacies and hopefully curving the Opioid crisis in the United States.

Anthony Huber, Belmont Law, Class of 2021

On September 24, Massachusetts Governor Charlie Baker ordered a four-month ban on the sale of all vaping products in the state. The ban was approved by the Public Health Council and took immediate effect.  “The purpose of this public health emergency is to temporarily pause all sales of vaping products so that we can work with our medical experts to identify what is making people sick and how to better regulate these products to protect the health of our residents,” Baker explained in a statement released on September 24.

As of September 24, 2019, the CDC announced that “805 confirmed and probable patient cases of lung injury associated with e-cigarette product use, or vaping were reported by 46 states and the U.S. Virgin Islands.”  The CDC also estimated that 27% of teenagers have used e-cigarettes, double the amount who have tried regular cigarettes.

The Massachusetts ban follows on the heels of recent decisions made by New York and Michigan.  New York was the first state to ban flavored e-cigarettes on September 17, 2019.  In support of the ban, New York Governor Andrew Cuomo stated: “New York is not waiting for the federal government to act, and by banning flavored e-cigarettes we are safeguarding the public health and helping prevent countless young people from forming costly, unhealthy and potentially deadly life-long habits.”

Michigan banned the sale of flavored e-cigarettes on September 18, 2019.  The ban went into effect immediately and is set to remain until January 2020.  Retailers and online sellers were given two weeks to comply with the ban.  On September 28, Michigan Governor Gretchen Whitmer stated: “For too long, companies have gotten our kids hooked on nicotine by marketing candy-flavored vaping products as safe.  That ends today.”

No doubt, these recent developments have set the table for a flurry of litigation disputes. In fact, a number of retailers have already filed civil suits arguing that there is no justification for using an emergency rule instead of proceeding through a process such as the Administrative Procedures Act. Retailers argue that their businesses will suffer irreparable harm, and that the states should not enact an emergency ban when there is still plenty of speculation toward what exactly is causing these deaths and lung injuries.

Retailers and critics of the vaping bans claim that states do not have the authority to ban vaping products by these emergency rules. They argue that the emergency bans are arbitrary and capricious, and that the states should have given them sufficient notice and an opportunity to be heard through a public hearing. As a result, the retailers argue that the emergency bans disregard the legislative process by not allowing the business to have a voice.

Ryland Close, Belmont Law, Class of 2020

Skilled nursing facilities and long-term care hospitals are struggling to control the spread of Candida auris, a drug resistant fungus that causes serious infections, particularly in vulnerable patients with pre-existing illnesses.[1]

Candida auris poses an especially serious threat as it is difficult to identify, spreads easily and quickly, and is difficult to treat.[2] Candida auris is one of the hundreds of different species of the common Candida fungus.[3] Candida is a type of yeast that regularly exists in the gastrointestinal tract, mucus membranes, and skin without causing any issues.[4] While Candida typically exists in our bodies without causing problems, an overgrowth of Candida causes infection known as candidiasis.[5] Historically antifungal medications have been successful at treating candidiasis; however the over-use of these medications is being blamed for the proliferation of drug-resistant pathogens such as Candida auris, for which most common antifungal medications are ineffective.[6]

Dr. Tom Chiller, the chief of CDC’s Mycotic Disease Branch, has called skilled nursing facilities “the dark underbelly of drug-resistant infection.”[7] So what makes these facilities prime breeding grounds for a drug-resistant fungus like Candida auris? One major challenge that skilled nursing home facilities face is that they are often understaffed and ill-equipped.[8] Without adequate staffing, nurses and orderlies fail to strictly adhere to protocols designed to control the spread of the infection, such as washing hands, wearing gloves, wearing protective masks, and maintaining up-to-date lists of infected patients.[9] Many skilled nursing facilities are ill-equipped to identify and remedy outbreaks of drug-resistant germs such as the Candida auris fungus.[10] Identifying Candida auris is difficult because specialized laboratory methods are needed to identify it.[11] Use of conventional laboratory testing methods can lead to Candida auris being misidentified as other types of yeast or other more common Candida species.[12] Misidentification in turn leads to mismanagement of the infection with antibacterial medication that is ineffective at treating Candida auris.[13]

Another factor that contributes to the spread of the infection in skilled nursing facilities and nursing homes is that the patients in these facilities are simply more vulnerable to infection.[14] Patients that have ventilators, breathing tubes, feeding tubes, central venous catheters, diabetes, or who have had surgery or broad-spectrum antibiotic and antifungal use are at higher risk of Candida auris infection.[15] Another troubling factor that contributes to the spread of the infection is that skilled nursing facilities frequently cycle their infected patients in and out of hospitals and back to the skilled nursing facilities, thus spreading the infections into hospitals.[16]

Although Candida auris is still rare in the United States, over the past four years nearly 800 people in the U.S. have been infected, half of whom have died within ninety days of being infected.[17] The CDC is working to control the spread of the infection by advising healthcare workers on ways to stop the spread of the infection, working with state and local agencies, healthcare facilities, and clinical microbiology laboratories to ensure that laboratories are using proper methods to detect Candida auris, and studying Candida auris strains to better understand the fungus and how it can be controlled.[18]

[1]  Matt Richtel & Andrew Jacobs, Nursing Homes Are a Breeding Ground for a Fatal Fungus, N.Y. Times, Sept. 11, 2019. Available at: https://www.nytimes.com/2019/09/11/health/nursing-homes-fungus.html.

[2] “Candida auris, General Information about Candida auris,” Last updated 9/23/2019. Available at: Centers for Disease Control and Prevention, https://www.cdc.gov/fungal/candida-auris/candida-auris-qanda.html.

[3] “Fungal Diseases, Candidiasis,” Last updated 4/12/2019. Available at: Centers for Disease Control and Prevention, https://www.cdc.gov/fungal/diseases/candidiasis/index.html.

[4] “Fungal Diseases, Candidiasis,” supra note 3.

[5] “Fungal Diseases, Candidiasis,” supra note 3.

[6] Richtel & Jacobs, supra note 1.

[7] Id.

[8] Richtel & Jacobs, supra note 1.

[9] Id.

[10] Id.

[11] “Candida auris,” supra note 2.

[12] “Candida auris,” supra note 2.

[13] Id.

[14] Richtel & Jacobs, supra note 1.

[15] Id.

[16] Richtel & Jacobs, supra note 1.

[17]  Id., See also, “Candida auris: A drug-resistant germ that spreads in healthcare facilities,” Available at: Centers for Disease Control and Prevention, https://www.cdc.gov/fungal/diseases/candidiasis/pdf/Candida_auris_508.pdf.

[18] “Candida auris: A drug-resistant germ that spreads in healthcare facilities,” supra note 15.

 

Ryland Close, Belmont Law Class of 2020; Patsy Powers and Justin Hickerson, Attorneys at Waller

The Centers for Medicare and Medicaid Services (CMS) is expanding its authority to revoke or deny providers’ and suppliers’ Medicare, Medicaid and Children’s Health Insurance Program (CHIP) enrollment based upon their affiliation with a sanctioned entity.

The rule will go into effect on November 4, 2019, and comments will be accepted until 5 p.m. on that day.

Under the new rule, providers and suppliers will be required to disclose in enrollment applications any current or previous, direct or indirect, affiliation (defined below) with a provider or supplier that:

1. has uncollected debt;
2. has been or is subject to a payment suspension under a federal health care program;
3. has been or is excluded by the Office of Inspector General (OIG) from Medicare, Medicaid, or CHIP; or
4. has had its Medicare, Medicaid, or CHIP billing privileges denied or revoked. CMS refers to these four categories as “disclosable events.”

The rule broadly defines “affiliation” as:

• a 5 percent or greater direct or indirect ownership interest that an individual or entity has in another organization;
• a general or limited partnership interest (regardless of the percentage) that an individual or entity has in another organization;
• an interest in which an individual or entity exercises operational or managerial control over, or directly or indirectly conducts, the day-to-day operations of another organization, either under contract or through some other arrangement, regardless of whether or not the managing individual or entity is a W–2 employee of the organization;
• an interest in which an individual is acting as an officer or director of a corporation; and,
• any reassignment relationship.

The rule defines “uncollected debt” as:

(i) Medicare, Medicaid or CHIP overpayments for which CMS or the state has sent notice of the debt to the affiliated provider or supplier; (ii) Civil money penalties imposed under this title; (iii) Assessments imposed under this title. Uncollected debt must be disclosed regardless of: (i) the amount of the debt;

(ii) whether the debt is currently being repaid (for example, as part of a repayment plan); or

(iii) whether the debt is currently being appealed.

The Secretary will soon be allowed to revoke or deny enrollment based on such an affiliation when the Secretary determines that the affiliation poses an “undue risk” of fraud, waste or abuse. The rule identifies factors that CMS will use to determine whether an “undue risk” exists. Those factors are:

• The duration of the disclosing party’s relationship with the affiliated provider or supplier;
• Whether the affiliation still exists and, if not, how long ago it ended;
• The degree and extent of the affiliation (for example, percentage of ownership); and,
• If applicable, the reason for the termination of the affiliation.

CMS will also look into the affiliate’s disclosable event when determining whether the affiliation poses an undue risk. The government will examine:

1. the type of action;
2. when the action occurred or was imposed;
3. whether the affiliation existed when the action (for example, revocation) occurred or was imposed;
4. if the action is an uncollected debt — (a) the amount of the debt; (b) whether the affiliated provider or supplier is repaying the debt; and (c) to whom the debt is owed (for example, Medicare); and,
5. if a denial, revocation, termination, exclusion, or payment suspension is involved, the reason for the action (for example, felony conviction; failure to submit complete information).

Fortunately for providers, CMS determined that it would be unduly burdensome for all providers to submit any applicable affiliation information as of the time this rule takes effect. Therefore, under the rule, a provider or supplier will be required to report any and all affiliations upon initial enrollment or revalidation or when CMS specifically requests such information from the provider.

With regard to Medicaid, CMS has adopted a “phased-in” approach to implementing affiliate disclosure requirements. This phased-in approach is aimed at achieving “a more targeted approach” that will be expanded with future rulemaking. With regard to Medicaid and CHIP providers and suppliers, each state will choose from one of two options for implementing the new affiliate disclosure requirements.

Under the first option, disclosures must be submitted by all newly enrolling or revalidating Medicaid and/or CHIP providers that are not enrolled in Medicare, while under the second option disclosures are only necessary if the state, with the consultation of CMS, determines that a disclosure is necessary and requests the disclosure from the provider.

Through this rule, CMS also expanded some of its current enforcement tools. For example, CMS plans to increase the maximum re-enrollment bar from three years to 10 years (with certain exceptions), and if a provider or supplier is revoked from Medicare for a second time, CMS may place a re-enrollment bar on that provider of up to 20 years.

Although the affiliation disclosures will be required only upon initial application, revalidation, or when specifically requested by CMS, individuals and entities that are affiliated with a number of providers and suppliers should begin the process of collecting or confirming information about its affiliates. The information required may be extensive, as the rule applies equally to for-profit and non-profit entities, and CMS has specifically stated that non-health care investors such as private equity sponsors, large mutual or pension funds will not be exempt from the affiliation disclosure requirements.

Amy Zink, Class of 2021; Kim Harvey Looney, Partner at Waller

The Court of Appeals for the Third Circuit has upheld a lower court ruling in Commonwealth of Pennsylvania v. President United States of America et al., which granted a nationwide preliminary injunction against religious and moral exemptions for employers to the Affordable Care Act’s (ACA) contraceptive mandate.

In the opinion written by Circuit Judge Patty Shwartz, the panel found that states had standing to bring the suit because they could establish a concrete and particularized injury from the exemptions. The panel found that the states would suffer concrete financial injury from the increased use of state-funded services due to women turning to state-funded services for their contraceptive needs. Further, the states would also see increased costs from the unintended pregnancies that may result from the loss of coverage due to the religious and moral exemptions.

The Third Circuit also determined the District Court correctly concluded that the states have a reasonable probability of showing that the Final Rules violate the Administrative Procedure Act (APA). The federal government argued that HIPAA allows the Secretary of Health and Human Services to issue interim final rules without notice and comment. The applicable section of HIPAA states that the Secretary “may promulgate any interim final rules as the Secretary determines are appropriate to carry out” certain provisions of HIPAA. The Third Circuit rejected that argument, holding that HIPAA did not excuse the agencies from APA procedures and therefore did not provide a basis for issuing interim final rules without notice and comment. The panel was also unconvinced that the Religious Freedom Restoration Act required a religious exemption from the Final Rules. The Third Circuit could not find infringement on the religious exercise of covered employees nor could they find a basis to conclude the accommodation process infringes on the religious exercise of any employer.

This decision is unlike the ruling in The Little Sisters of the Poor Jeanne Jugan Residence v. California, et al. in the Ninth District, which affirmed the preliminary injunction but rejected the injunction’s nationwide scope, ruling that the preliminary injunction was overbroad and that district judges must require a showing of nationwide impact to foreclose litigation in other districts. The Third Circuit found that the District Court did not abuse its discretion in concluding that a nationwide injunction is necessary because it was not more burdensome to the defendant than necessary, and the nationwide injunction was required to provide relief to the states.

VIDEO: Sanders says birth control limitation is ‘all about’ freedom of religion

Clay Brewer, Class of 2019; Neil B. Krugman, Partner at Waller

The rise in healthcare costs and public concern about accessing adequate care has caught the eye of many government officials across the country, some of whom have increased their enforcement of consumer protection laws in response.

The Attorney General of Pennsylvania, Josh Shapiro, provides a recent example.

In 2012, the University of Pittsburgh Medical Center (UPMC), an integrated nonprofit hospital, announced that it would no longer contract with Highmark, a health insurer, due to Highmark’s recent affiliation with a large UPMC rival, Allegheny Health Network. In 2014, despite continuing disagreements, UPMC and Highmark entered into a consent decree with the Attorney General, the Pennsylvania Insurance Department and the Pennsylvania Department of Health. With the aim of protecting consumers, the decree permitted in-network access for certain groups of Highmark members (such as senior citizens) to certain unique or exception UPMC hospitals and providers.

The decree expires on June 30, 2019. With that date nearing and no resolution in sight to UPMC’s dispute with Highmark, in February 2019, General Shapiro filed a petition in Pennsylvania state court against UPMC, contending that UPMC has failed to meet its charitable purpose and seeking to require “that all charitable, nonprofit health systems contract with all health insurers who want to do business with them.”

In a recent counterclaim filed in federal district court, UPMC has labeled General Shapiro’s actions as unprecedented and illegal because they usurp the rights of nonprofit healthcare providers. Not only does the petition essentially force nonprofit providers to contract with insurers, UPMC claims, but it also allows the state to infringe upon federal government programs such as Medicare Advantage, the Patient Protection and Affordable Care Act (ACA), the Sherman Act and the Employee Retirement Income Security Act of 1974 (ERISA).

On April 3, Shapiro witnessed a setback with a Pennsylvania state court ruling that the court lacks authority to extend a consent decree without an allegation of fraud, accident or mistake or mutual consent by the parties, despite the impact the Attorney General claims it may have on the greater population. Interestingly, the court declined to rule on most of the primary issues such as whether the Attorney General has the power to regulate nonprofits and whether UPMC, in fact, violated its charitable mission.

Although an initial victory for nonprofits, this case will continue to be closely monitored for the impact it may have not only in Pennsylvania but also in the national discussion on the intersection between healthcare costs and consumer protection laws.

Shapiro says he will continue to fight for consumer protection, and submitted an appeal of the trial court’s decision to the Pennsylvania Supreme Court in early April.

By Philip FitzGerald, Class of 2019; Colin H. Luke, Partner at Waller

In late March, the Department of Justice (“DOJ”) issued a letter to the U.S. Court of Appeals for the Fifth Circuit supporting the holding by District Court Judge Reed O’Connor that the Affordable Care Act’s (“ACA’s”) individual mandate is unconstitutional and therefore the entire ACA should be repealed.

The DOJ’s letter states that it “is not urging that any portion of the district court’s judgment be reversed.”  We have addressed Judge O’Connor’s decision in a previous blog post. The DOJ’s letter is a departure from its original argument that, although the individual mandate was unconstitutional, it was severable from the rest of the unrelated provisions in the ACA.

At issue before the Court is whether the removal of the individual mandate’s penalty by the Tax Cuts and Jobs Act has invalidated the mandate. If so, does that mean the entire ACA is unconstitutional or is the mandate and its dependent provisions (such as the protections for pre-existing conditions) severable from the rest of the ACA?

Although the DOJ will no longer be supporting the severability argument, Ohio Attorney General Dave Yost, a Republican, filed a friend-of-the-court brief arguing that the unconstitutionality of the individual mandate does not invalidate the rest of the ACA. In support of his argument is the fact that Congress essentially removed the individual mandate in 2017 by reducing the penalty to zero for not having health insurance, while keeping the rest of the ACA’s provisions, such as protections for pre-existing conditions.

A friend-of-the-court brief in support of the Democrat-led states defending the ACA was filed on April 1 by the American Hospital Association, the Federation of American Hospitals, the Catholic Health Association of the United States, America’s Essential Hospitals and the Association of American Colleges. In their brief, they claim that the wholesale judicial repeal of the ACA will remove millions from the insurance rolls, which will hurt not only patients but also hospitals that will be burdened with providing a greater amount of uncompensated care. Additionally, the brief argues that the ACA established numerous programs to address pressing health care needs, such as the opioid crisis and providing more support for the country’s aging population, which would indicate that Congress could not have intended for the entire ACA to be repealed with the elimination of the individual mandate.

On April 10, the Fifth Circuit agreed to expedite the case, setting oral arguments for July. However the Court rules, there is a good probability that the decision will be appealed to the Supreme Court, and the ACA will likely remain in effect as it winds its way through the judicial process.