By Emmie Futrell, Class of 2018

Picturing Amazon drones dropping pharmaceuticals from the sky, or Amazon’s Alexa
becoming Dr. Alexa, MD, may not be so far-fetched as it sounds. Amazon has reportedly
obtained approval for wholesale pharmacy licenses in at least 12 states. They include Nevada,
Arizona, North Dakota, Louisiana, Alabama, New Jersey, Michigan, Connecticut, Idaho, New
Hampshire, Oregon and Tennessee. An application is still pending in Maine.
The infrastructure required for Amazon to begin shipping pharmaceutical drugs to
consumers is still in its infancy—the recently obtained licenses only allow Amazon to sell
medical-surgical equipment, devices and products. These include tools like syringes, ultrasound
gel, and sutures, while Amazon’s license in North Dakota suggests that it may be able to
distribute medical equipment and gas. Complex regulations and specific pharmacy licenses that
vary state-to-state will provide additional hurdles for Amazon, if the end goal is to distribute
prescription drugs. For example, Amazon would need to be certified by the National Association
of Boards of Pharmacy as a “Verified Accredited Wholesale Distributor,” in order to distribute
pharmaceuticals.

However, these hurdles may not seem as high as one would expect. With Amazon’s
recent acquisition of Whole Foods, Amazon could implement and use Whole Foods pharmacies
as a platform to create a mail-order pharmacy, effectively controlling an Amazon-owned supply
chain. Amazon’s reach and boundary-pushing technology could make the company attractive to
name brand pharmaceutical manufacturers, searching for innovative ways to reach their
customers.
This move towards the outskirts of the pharmaceutical industry has not been lost on
traditional pharmacy benefits managers like Walgreens and CVS. In January of 2017, Walgreens
Boots Alliance and FedEx announced a several-year agreement to install FedEx pick-up and
drop-off services in Walgreens stores. The long-term goal of this agreement is to create
infrastructure for reliable deliveries of prescribed pharmaceuticals to Walgreens customers, to
ensure that elderly, disabled or other mobility-challenged patients are still able to access their
much-needed prescriptions. Currently, mail order pharmacy services only dispense about 1 in 10
prescriptions of the total four billion that are filled in the United States. Perhaps this recent
Amazon movement intends to increase that number.
There are many other benefits to the mail-order pharmacy framework, enough that
insurance providers like BlueCross BlueShield of Tennessee have given their endorsement. Not
only are mail-order pharmaceuticals convenient, but they could also have a positive effect on
adherence. The BlueCross framework of delivering a 90-day supply ensures that there are no
gaps in prescription access that may be caused by attempts to plan a trip to a local pharmacy.
With the current climate seemingly accepting of the movement of prescriptions out of the
traditional brick-and-mortar pharmacies, the industry seems poised for Amazon’s tiptoe into this
market.

The Practitioner’s Guide to Health Care Law & Policy would like to congratulate two of our own for having their work published in in the Birmingham Medical News. Chase Doscher and Emmie Futrell, along with our friends Patricia Powers and Alexander Mills from Waller, had their article about the Escobar Materiality Standard published in November. Please join us in congratulating them.

You can see the article on the Birmingham Medical News website

By William Dodd, Class of 2019

The Veterans’ Access to Care through Choice, Accountability, and Transparency Act of 2014, more commonly known as the Veterans Choice Program, is a U.S. public law that works to expand the number of healthcare options available for eligible veterans. Among many provocations leading up to the creation of the Program, one of the primary driving forces behind enacting the law was the Veterans Health Administration Scandal of 2014, which uncovered years of lies regarding the true wait times for veterans seeking medical care. Along with expanding medical staff and the number of VA facilities, one of the primary provisions of the Choice Program allows veterans living 40 miles or more from a VA clinic, or who are unable to get an appointment within 30 days, to seek treatment from a non-VA facility. In order to accomplish this, the 2014 Choice Program set forth $2 billion altogether, with $500 million specifically intended to increase the number of medical personnel in the VA system. The result of increased healthcare options after years of systematic failure led to an immediate increase in demand for healthcare services. Ultimately, the initial $2 billion proved insufficient to carry the program through to a long-term legislative remedy.

To combat the lack of funding for the popular program, as well as Congress’s failure to enact a timely and suitable long-term remedy, the Trump administration provided $2.1 billion in emergency funding to keep the Choice program alive. However, only weeks after the emergency funding was provided, it became clear that the program may require additional funding to avoid disruption of care for hundreds of thousands of vets. Based on estimates from David Shulkin, VA Secretary, the $2.1 billion in emergency funds will likely run out by mid-December of this year. In addition, Shulkin stated that any additional funding received would be used to bring facilities closer to where veterans live, which would continue to increase access to care for eligible veterans.

While pouring money into the Program may serve as the best option to temporarily meet the immediate demand – generated by years of lack of access to quality care – a long-term legislative fix is the best step to moving forward. As policy director for Concerned Veterans for America, Dan Caldwell, stated, “while Congress must quickly move forward on a temporary fix for the VCP budget shortfall, the Choice Program must ultimately be overhauled, expanded, and permanently reformed.” A long-term plan would likely save money through the creation of a sustainable, organized system to increase access for veterans across the board; however, before any such plan can be enacted, the immediate goal for lawmakers and the Trump administration is to meet to immediate demands of the current crisis.

After speaking with the Trump administration to address the issue of moving forward, Mr. Shulkin has promised to expand the Program during the 2018 year. Pursuant to Mr. Shulkin’s promise, President Trump has proposed an additional $2.9 billion increase in Program funding for the 2018 year, as well as another $3.5 billion in 2019. Along with increased funding projected over the next two years, proposed revisions in the Choice Program seek to eliminate the 30-day or 40-mile eligibility requirements to receive care from non-VA providers. Namely, this process would be done pursuant to the Veterans Coordinated Access and Rewarding Experiences (CARE) Act, a recent proposal from Shulkin. Along with eliminating the aforementioned eligibility requirements, the CARE Act would also include a “health risk assessment,” to be performed by VA personnel, in order to determine which provider – VA or private – will better meet the needs of the veteran-patient. The results of this assessment, as Mr. Caldwell stated, “will incentivize VHA facilities to become higher-performing health care providers through competition.” In Mr. Shulkin’s words, “at minimum, where the VA does not offer a service, veterans will have the choice to receive care in their communities.”

However, the CARE Act has experienced strong pushback from organizations, such as the American Federation of Government Employees (AFGE), on the basis that the CARE Act and similar proposals would “voucherize” VA in favor of private care. In response to this, House VA Committee Chairman, Phil Roe, stated that “this effort is in no way, shape or form intended to create a pipeline to privatize the VA health care system.” Moreover, in Shulkin’s words, “this is about building a VA that veterans choose for their care . . . We want veterans to choose VA.”

Other parties, such as director of the Schaeffer Center for Health Policy and Economics at USC, Dana Goldman, hold the exact opposite view. Goldman advocates for the VA’s complete integration into mainstream private healthcare through the provision of Platinum Plans under the ACA, which are required to cover 90% of the cost of all essential health benefits, and often include no co-payments or deductibles. According the Goldman’s estimates, the average annual cost of a Platinum Plan is around $5,000. If such plans were offered to every veteran under the age of 65, based on the $5,000 annual estimate, this plan would drastically reduce the amount paid annually for coverage of individual vets, which is currently around $7,700. Pursuant to Goldman’s reasoning, the cost savings could be directed towards specialized care for individuals with unique health needs, such as those who suffer from traumatic brain injuries, PTSD, and infectious diseases.

Currently, due to the organizational, administrative failure within the VA system, in regards to reimbursement within the private sector, many private providers have expressed a lack of interest in treating veteran-patients due to the lack of response, administrative hassle, and delayed payments in dealing with the VA. If Goldman’s plan caught on, the impact on private providers would be substantial. Already, more than 30% of VA appointments are made in the private sector. If complete integration were to ever take place, private providers would receive higher volume and guaranteed federal reimbursement for treating veteran-patients, and the VA could focus its efforts solely on administration and the provision of non-healthcare services. This plan would also eliminate the perpetual conflict in regards to whether veterans are receiving quality care, as well as the shortage of health professionals within the current VA system, as complete integration into private healthcare would offer all veterans an opportunity to seek out the best providers to meet their healthcare needs.  

Concerning where to go from here, for current VA attorneys, staff, and providers in the private sector, much will be determined in the coming months as proposals and reform measures continue to be set forth. With the VA system in its current state, proposed remedies range all the way from complete reform to complete integration. Unfortunately, little can be determined as of the current moment, and a wait and see approach is all anyone can do for the time being. As for the veterans in need of care, change cannot wait, and Congress needs to act quickly in order to ensure proper treatment and quality care for those who served and continue to serve our country valiantly.

By Brandon Huber, Class of 2019

According to the Wall Street Journal, CVS and Aetna are reportedly in serious talks over a potential merger between the two healthcare giants. With the potential buyout price in the ballpark of $70 billion, the deal would not only set the record for the largest merger of any two companies in 2017, it would easily be considered the largest health provider merger of all time, shattering Express Scripts’ $29 billion merger with Medco back in 2012.

The deal would combine CVS, currently the largest pharmacy retail chain, with Aetna, the third largest health insurer provider in the United States. Although both companies have declined to comment on the negotiations of the deal, there have been reports that a deal could be reached by the two companies as soon as December. Despite the growing pressure over the last few years on healthcare providers to consolidate, due in large part to soaring medical costs, a merger of this size promises to send a shockwave across the entire healthcare industry.

The merger comes on the heels of news that Amazon, the online retail giant, almost certainly will enter the prescription-drug market as soon as 2019. Although Amazon has not yet announced any official plans to enter the pharmacy retail business, there can be little doubt that even rumors of such plans would be enough to motivate CVS, and other pharmacy retail chains, to find creative ways to expand and grow.

CVS’ buyout of Aetna, at least from the outset, seems to present the perfect opportunity for both companies to benefit from the deal. On the other hand, however, whether consumers stand to gain any benefit from the merger remains to be seen. From Aetna’s perspective, the merger affords the opportunity to provide better care management. Insurers have long believed that the best way to control rising healthcare costs is to ensure they have more access into the lives of their beneficiaries. The deal would help Aetna ensure its beneficiaries were staying on their medicines, getting the care they need at more cost-effective locations—like a CVS health clinic—as opposed to a more expensive and perhaps unnecessary hospital visit.

Conversely, not only would CVS be able to expand its reach within the healthcare market, the deal would drive more traffic to its stores as more of Aetna’s insured beneficiaries would seek preventive care and treatment for less serious medical issues at the clinics located within CVS stores. Additionally, CVS could expect an influx of customers because Aetna’s beneficiaries would likely use CVS to get their prescriptions filled.

With that said, however, despite the near guarantee that both parties would benefit significantly from such a deal, there are some who remain skeptical as to whether the deal will benefit consumers. According to Amanda Starc, associate professor of strategy at Northwestern’s Kellogg School of Management, CVS’ position as a pharmacy benefit manager would allow the merged companies to negotiate lower drug prices with pharmaceutical manufacturers. It is unlikely, however, that these newly acquired drug-rates, now available to Aetna as a result of its newly acquired market power, would translate into lower prices for customers and not into profits for the company.

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.

By Chase Doscher, Class of 2018; Emmie Futrell, Class of 2018; Alexander H. Mills, Associate at Waller

On March 15, 2017, the U.S. District Court for the Western District of Pennsylvania issued an opinion in United States ex rel. Emanuele v. Medicor Assocs. applying the materiality standard from Universal Health Services v. United States ex rel. Escobar to the “writing requirement” utilized throughout various exceptions to the Stark Law. The District Court found that this requirement, and the signature requirement specifically, represents a material component of the Stark Law for purposes of establishing liability under the federal False Claims Act (FCA). On August 25, 2017, the court denied the defendant’s motion for reconsideration, affirming its initial interpretation.

The Stark Law

The Stark Law exists for the purpose of prohibiting a physician (or an immediate family member of the physician) from making referrals for “designated health services” to an entity with which the referring physician (or immediate family member) has a financial relationship unless the parties comply with one of the exceptions set forth in the federal regulations. Additionally, Stark prohibits entities like hospitals from submitting claims for payment to Medicare or Medicaid for items or services that result from the prohibited referrals. Although the concept of a “financial relationship” may seem simple, Stark defines the term broadly and includes both ownership and investment interests and compensation arrangements between physicians (and their immediate families) and entities. Violation of the Stark Law can incur significant civil liability under the False Claims Act, civil monetary penalties, and exclusion from all federal healthcare programs. Included in the framework of the Stark Law are numerous exceptions to civil liability. One common theme among them is the requirement that any arrangement must be evidenced by signed writing.

Materiality Under Escobar

In 2016, the United States Supreme Court set out in Escobar that generally, when submitting a claim for payment from a government payor, a healthcare provider makes certain implied representations regarding the goods and services which are the subject of the claim. The Court held that when a provider fails to disclose certain critical information, the offense is actionable if it results in a material misrepresentation affecting the government’s payment decision. The Court noted that a misrepresentation is not material for the mere fact that the government designates compliance with a particular requirement as a condition of payment. Factors that are considered in determining materiality include:

• Whether the violation goes to the “essence of the bargain” or is instead a “minor or insubstantial” detail
• Whether the government has expressly identified a particular requirement as a condition of payment (which would weigh in favor of materiality); and
• Whether the government has consistently refused to pay claims due to noncompliance with a requirement (which would also suggest materiality), or has regularly paid claims despite actual knowledge that the requirement was violated (which represents “strong evidence” that the requirement is not material).

The Pennsylvania Court’s Analysis

The Western District of Pennsylvania further clarified the boundaries of the FCA materiality bar for healthcare providers. While Escobar may have left healthcare providers with a murky picture of the intended definition of materiality, the Emanuele court outlined the reach of this requirement, especially with respect to the interconnection of other fraud and abuse statutes.

In November 2016, the Centers for Medicare & Medicaid Services (CMS) codified amendments to the Stark Law to make it easier for healthcare providers to meet the writing requirement. Many of the Stark exceptions require a written agreement between a referring physician and an entity with which the physician has a financial relationship. This requirement was originally interpreted to be a writing in the form of a single signed agreement, but CMS amended language across the statute to relax this exacting standard. The amendments instead allowed for the writing to be codified in an “arrangement” or various contemporaneous documents evidencing the conduct between the parties. CMS explained:

In most instances, a single written document memorializing the key facts of an arrangement provides the surest and most straightforward means of establishing compliance with the applicable exception. However, there is no requirement under the physician self-referral law that an arrangement be documented in a single formal contract. Depending on the facts and circumstances of the arrangement and the available documentation, a collection of documents, including contemporaneous documents evidencing the course of conduct between the parties, may satisfy the writing requirement of the leasing exceptions and other exceptions that require that an arrangement be set out in writing.

Despite relaxing the standard for what constitutes a writing sufficient to meet a Stark exception, however, the Emanuele court illustrates that the writing requirement remains significant. The court initially noted that the Stark Law expressly prohibits payment on Medicare claims that do not satisfy each element of an applicable exception. As such, all claims submitted by healthcare providers to CMS inherently imply compliance with the requirements of any relevant Stark exception. The court, quoting Escobar, cautioned that although “statutory, regulatory, and contractual requirements are not automatically material, even if they are labeled conditions of payment,” they nevertheless represent “relevant” evidence in favor of materiality.”

The court went on to ultimately conclude that the Stark writing and signature requirements are material, after satisfying several of the factors of materiality from Escobar. A signed writing allows reviewers to consider whether agreements vary with the volume or value of services based on the timeframe, compensation and exact services that they contain and whether both parties consent to the agreement. These elements, therefore, go to the basis of the bargain between the government and healthcare providers, because of the role that they play in preventing fraud and abuse. Therefore, the court concluded, the writing requirement is “important, mandatory, and material to the government’s payment decisions.”

Emanuele represents the first time that a federal court has had the opportunity to interpret and enforce CMS’s 2016 amendment as to the writing requirement. It can’t be overstated that the writing requirement is essential to ensure compliance with exceptions and avoid liability under Stark. Although the linguistic shift to an “arrangement” intended to relieve healthcare providers from the necessity of strictly maintaining and updating written agreements, the collection of contemporaneous writings still must contain the minimum requirements set forth in the regulations, notably a signature. Without meeting these requirements, healthcare providers may be exposed to liability under both Stark and the FCA, since federal courts will likely continue to interpret the writing requirement to go to the “basis of the bargain” between healthcare providers and CMS.

By Andy Cole, Class of 2018

The United States House of Representatives voted to approve H.R. 36, Pain-Capable Unborn Child Protection Act, a bill that would ban abortions in the country after 20 weeks of gestation because some scientific studies show that fetuses can feel pain at 20 weeks. Similar legislation passed in the House in 2015, but failed in the Senate. Even though the legislation probably faces a similar fate this year, it is important to look at the legislation and determine what would happen if this legislation did pass in the Senate and was signed by the President.

Most people point to the landmark case of Roe v. Wade to talk about abortion constitutionality. However, nearly twenty years after Roe, the Supreme Court largely affirmed its ruling from Roe in Planned Parenthood v. Casey. Casey offered the Supreme Court an opportunity to overturn Roe. Instead of overturning Roe, the Court created an undue burden test. This test continued to allow states to prohibit post-viability abortions, with the exception of cases where the life and health of the mother are at stake, but changed the rest of the analysis. Under the Casey framework before a fetus reaches viability, a woman has the right to have an abortion without an undue burden. This changes slightly from Roe. The idea of an undue burden test still exists today.

Many pro-life groups argue that these bills are constitutional, or alternatively pain capable standard is a better standard than viability standard.This option has been met with some controversy. The bill passed by the House, would make it a crime to perform abortions after 20 weeks with exceptions for rape, incest, and to save the life of the mother.

Many states have passed similar statutes, and some of these have been challenged in court based on the fact that they are unconstitutional because they violate the viability standard. Currently, there are very few cases of fetuses surviving if born at 20 weeks, which is problematic under the viability standard.

Some of the early versions of these bills have started making their way through the judicial system. In Isaacson v. Horne, the Ninth Circuit held that an Arizona law that prohibited abortions beginning at 20 weeks with a medical emergency exception. Both parties in the case agreed that a fetus is typically not viable at 20 weeks. The Court held that the State’s interests were not strong enough to prevent pre-viability abortions. However, a pain cable bill has never actually been argued in front of the Supreme Court.

Attorneys representing critics of these bills can argue that the bills are unconstitutional based on the viability standard and that the science behind the pain capable testing is disputed and controversial. Additionally, they can argue that pain capable acts restrict a woman’s right to an abortion at a time when the fetus would not be able to live outside of the womb. Many can argue that the science behind these bills is not strong enough to overturn the viability standard. The critics say that there is truly no way to know if a fetus is feeling pain in the womb or just experiencing a flinch or reaction to something that doctors and researchers could be mistaking as the sensing of pain.

Attorneys representing legislatures and pro-life groups can point to the fact that there are recently documented cases of fetuses surviving outside of the womb at 20 weeks. In fact, one child who survived at 20 weeks was present during the introduction of the bill in the House. Attorneys can also point to the rapid advance in medical technology that allows premature children to live at even earlier points in the gestation cycle. Additionally, attorneys can argue for a change in the viability standard and by the time this bill would reach the Supreme Court, there is likely to be changes on the court.

Senator Lindsey Graham has introduced the bill in the United States Senate. In the unlikely event this bill does pass the Senate, it is more than likely unconstitutional based on current standards. However, things could definitely change in the event of a change on the Supreme Court.

By Chase Doscher, Class of 2018; Colbey B. Reagan, Partner at Waller; Daniel Patten, Associate at Waller

Last April, the Center for Medicare & Medicaid Services (CMS) issued a change request making revisions to Chapter 15 (Medicare Enrollment) of the Medicare Program Integrity Manual. Specifically, this change request made significant alterations to Section 15.7.7.1.5 – Electronic Funds Transfer (EFT) Payment and CHOWs. Prior to the change request, when dealing with a change of ownership (CHOW), Medicare Administrative Contractors (MACs) continued to pay the Seller of a healthcare provider or facility until they received the tie-in notice from the CMS Regional Office. MACs would reject any application submitted by either the Seller or the Buyer to change the EFT account or special payment address prior to receiving approval from CMS. The ultimate responsibility for determining payment arrangements was left to the Buyer and Seller while the MAC and CMS processed the CHOW application.

Effective May 15, 2017, when the Seller and the Buyer initiate a CHOW, the provider agreement in existence, alongside the CMS Certification Number (CCN), is assigned automatically from the Seller to the Buyer effective on the transfer date. It is important to note that the Buyer retains the ability to reject the automatic assignment prior to the transfer date. To reject the automatic assignment of the provider agreement, the Buyer must file an initial participation application with the Medicare program. The assigned provider agreement is still subject to all applicable statutes and regulations as well as the terms and conditions under which it was issued. Any contractor will continue to adjust payments to the provider to account for both prior overpayment and underpayment, even if the claims relate to services provided before the CHOW. Additionally, the Buyer in a CHOW may obtain a new National Provider Identifier (NPI) or maintain the existing NPI. Once the CHOW processing is complete, the Seller will no longer be allowed to bill for services furnished after CHOW processing, and only the Buyer is permitted to submit claims using the existing CCN. It is important for parties undergoing CHOW processing to understand that under the implemented changes, any payment arrangement for services furnished during the CHOW processing period is left up to the parties to work out. One primary implication of this is that the Buyer will have some long-term responsibility to bill for services provided by the Seller during CHOW processing.

 

By Emmie Futrell, Class of 2018; Patsy Powers, Partner at Waller; Daniel Patten, Associate at Waller

On August 17, 2017, CMS published a proposed rule that could bring about significant changes to some of its Innovation Center’s major payment models. Specifically, the Proposed Rule would:

• reduce the number of mandatory geographic area participants of the Comprehensive Care for Joint Replacement (CJR) model;
• cancel the Episode Payment Models (EPMs) and Cardiac Rehabilitation (CR) incentive payment model; and
• increase the pool of practitioners that qualify under the Advanced Alternative Payment Model.

These changes may be surprising to some as these models are still in their infancy. The CJR model started last year, and the EPMs and CRs were not scheduled to begin until January 1, 2018.

Perhaps the most striking element of the Proposed Rule is the removal of 33 geographic areas (of the currently 64 geographic areas) where participation in the CJR model has been mandatory. Instead, CMS proposes that such hospitals participate in the CJR model on a voluntary basis, especially hospitals with low volume or those located in rural areas. These hospitals are provided with a one-time option whereby continued participation in the CJR model will be left to their discretion. CMS believes that moving the CJR model away from a mandatory requirement will increase the likelihood that providers will participate in future voluntary initiatives. Hospitals that choose to continue participation in the CJR model will receive a target price for these procedures from CMS each year, and the proposed rule includes refinements and clarifications to this payment process.

CMS is accepting public comments on these revisions, which can be electronically submitted here, until October 16, 2017.

By Will Blackford, Class of 2017

On January 13, 2017, the Centers for Medicare and Medicaid Services (“CMS”) published in the Federal Register its Final Rule pertaining to the Conditions of Participation (“CoPs”) for home health agencies (“HHAs”). The rule represents the first modernization in over two decades of the fundamental requirements for HHA participation in Medicare and Medicaid, despite efforts in 1997 to revise the entire set of HHA CoPs. With enforcement of the new provisions beginning July 13, 2017, CMS has given HHAs a six-month window for adapting their policies, procedures, and practices to comply with the new standards.

The most significant changes under the Final Rule revolve around four categories:

• Patient Rights. CMS added an expansive CoP that sets forth the specific rights that HHAs owe each patient and the steps they must take to protect such rights.
• Care Planning. The final rule updates the comprehensive patient assessment requirement to focus on all aspects of patient wellbeing. It also requires that a HHA provide its patients with a written copy of the plan of care and utilize an integrated communication system to identify and coordinate care between the HHA and the patient’s physicians.
• Quality Assessment and Performance Improvement. To ensure continual evaluation and improvement of care for patients, CMS will now require that HHAs initiate a data-driven, agency-wide quality assessment and performance improvement (QAPI) program that is capable of measuring improvement in indicators that are linked to improvement in patient outcomes, safety and care quality.
• Infection and Prevention Control. The new infection prevention and control requirement that focuses on the use of standard infection control practices, and patient/caregiver education and teaching.

In addition to the modified care standards, CMS also refined the definition of “Representative” to expressly distinguish between a patient-selected representative and a legal representative with legal decision-making authority under the law. There are numerous updates throughout the Final Rule that are shaped by this two-tiered approach to representation.

To meet these new requirements, HHAs need to familiarize themselves with the Final Rule and analyze their current policies and procedures to formulate a plan for tackling implementation of these significant changes. Agencies that fail to comply with any of the new CoPs by the July 13, 2017 deadline are at risk of penalties ranging from imposition of sanctions for marginal issues, to program termination for major infractions.