Over the past couple of years, FDA has introduced multiple programs allowing faster review of medical devices in order to get them to market more quickly. Some of the FDA’s efforts have been highly visible, such as the Breakthrough Devices program in the 21st Century Cures Act and the Software Precertification pilot program in the FDA’s Digital Health Innovation Action Plan. Others have been less trumpeted but are still significant developments for device manufacturers. This series of programs is consistent with FDA’s trend of making market entry for devices more efficient and reducing regulatory barriers for devices with low risk profiles and for devices that may be desperately needed by specific patient populations. Continue Reading FDA Introducing a Variety of Programs to Help Medical Devices Get to Market

ACA plans scored a major victory last week when a federal court held that health plans participating on the ACA exchanges are entitled to unpaid cost sharing reduction (CSR) payments from the federal government. The case – Montana Health CO-OP v. United States –  is the first decision opining on the federal government’s obligation to make CSR payments.[1]  However, this is but one of several significant legal rulings handed down this year in the perpetual battle between CO-OP plans and the federal government over the latter’s administration of the ACA.  For example, federal courts in Massachusetts and New Mexico ruled on the legality of government’s method  for calculating risk adjustment payments in January and February, and in June, a federal appellate court ruled on the government’s obligation to make payments under the ACA’s risk corridor program.   While these decisions address different ACA programs and have unique facts, each case essentially boils down to a question over the government’s obligation to administer the ACA as it was statutorily conceived. Continue Reading Court Rules that Federal Government Must Make Cost Sharing Reduction Payments to Insurers

Congress continues to make progress towards funding the government despite having only seven business days remaining with both chambers in town prior to the September 30 deadline. The House Energy & Commerce Committee will be taking a closer look at value-based care in Medicare, which could touch on potential changes to the Stark Law and the Anti-Kickback Statute. We cover this and more in this week’s ML Strategies Health Care Preview, which you can find by clicking here.

We have continually provided updates on the application and approvals of Medicaid 1115 waivers that include work requirements. One such approved waiver is the Arkansas Works Program. As we previously noted, Arkansas became the first state to implement work requirements for Medicaid eligibility. A July 2018 report found that just over 46,000 Medicaid enrollees were subject to the requirement at that time. Of those enrollees, 30,228 were exempt from reporting because they were already employed or in school, had met the work requirement for SNAP eligibility, were disabled, or had at least one dependent child. 12,722 enrollees did not satisfy the reporting requirement, 1,571 reported an exemption, and 844 satisfied the reporting requirements. Continue Reading Arkansas 1115 Waiver Update – Work Requirement Implementation and Lawsuit

Last week, Bruce Sokler and Farrah Short from Mintz’s Antitrust practice group published a detailed alert regarding the Third Circuit’s reinstatement of an antitrust suit brought by medical device manufacturer LifeWatch Services, Inc. (“LifeWatch”) against the Blue Cross Blue Shield Association and five of its member insurance plan administrators: LifeWatch Services Inc. v. Highmark Inc. et al., Case No. 17-1990 (3rd Cir. Aug. 28, 2018).

LifeWatch sells telemetry monitors, a type of outpatient cardiac monitoring device, which several medical studies have found to be effective, and in some circumstances, medically necessary and superior to other treatments. Some large private insurers, as well as the Medicare and Medicaid programs, provide coverage for telemetry monitors, but the Blue Cross Blue Shield Association (which owns the right to the Blue Cross Blue Shield trademarks and tradenames and licenses them to insurers nationwide, including several defendants in this case), maintains a model medical policy that recommends not covering telemetry monitors, characterizing them as not medically necessary and/or investigational.

LifeWatch filed suit in federal court in 2012, suing the Blue Plans and the Association for $67 million and alleging that they conspired to deny coverage of its telemetry device despite scientific evidence supporting the benefits of the device. The district court dismissed the case for failing for allege anticompetitive effects. In particular, the district court found that LifeWatch failed to allege “competition-reducing” conduct on the grounds that each Blue Plan treats all telemetry providers equally and that Blue Cross’s actions were a legal exercise of its substantial buying power and ability to bargain aggressively.

On appeal, the Third Circuit Court of Appeals found that LifeWatch plausibly stated a claim and has antitrust standing. In particular, the court found that: (1) LifeWatch sufficiently relied on circumstantial evidence of an agreement by alleging both parallel conduct among the Blue Plans and “something more” (or a “plus factor”); (2) LifeWatch’s complaint alleged a national market for the purchase of outpatient cardiac monitors (rather than a market limited to telemetry monitors); (3) LifeWatch sufficiently pled anticompetitive effects; and (4) LifeWatch sufficiently alleged antitrust injury to have antitrust standing.

Ultimately, the Third Circuit found that LifeWatch had plausibly pled a Sherman Act Section 1 claim and remanded the case back to the district court. The Third Circuit also left open for the district court to consider whether Blue Cross is exempt from liability under the McCarran-Ferguson Act.

This decision is important because, while there are other antitrust challenges pending against the Association and its members, this case appears to be the first appellate “green light” to proceed on a challenge to the Association’s model medical policy and its implementation. For more detail and an in-depth analysis, you can read the full Alert HERE.

On August 10, 2018, South Dakota submitted a five-year Section 1115 waiver application to CMS to implement the South Dakota Career Connector program. The waiver application proposes work requirements for certain Medicaid beneficiaries. South Dakota is the latest to submit a 1115 waiver including work requirements.

Click here to read our full summary of the South Dakota 1115 waiver. 

Comments to CMS are due September 26, 2018.

You can read our past coverage of state Section 1115 waivers here.

*Madeleine Giaquinto contributed to this post.

Congress is back in session with several high-profile hearings and looming deadlines. The Senate will begin consideration of the nomination of Brett Kavanaugh to the U.S. Supreme Court and will begin its work with the House on conferencing a number of appropriations bills. In order to avoid a government shutdown, Congress will need to finalize its appropriations bills prior to October 1st or pass a continuing resolution. Also on our radar is the commencement of oral arguments regarding the Texas v. USA case which challenges the constitutionality of the ACA’s individual mandate along with the guaranteed issue and community rating provisions. We cover this and more in this week’s preview which you can find by clicking here.

News alert for all New Jersey health care providers! A new law went into effect yesterday (August 30, 2018) that changes billing requirements for out-of-network services in New Jersey. Known as the “Out-of-Network Consumer Protection, Transparency, Cost Containment and Accountability Act,” the bill, true to its name, puts forward an effort to regulate out-of-network (“OON”) billing and prevent patients from receiving “surprise bills.”

Much of the discussion in the bill regarding its purposes focuses on OON services provided by an OON provider at an in-network facility resulting in patients receiving large, unexpected bills. The preamble even cites surprise bills for “hospital emergency room procedures or for charges by providers that the consumer had no choice in selecting” as a problem for New Jersey consumer. However, in an effort to prevent these situations, the bill’s sweeping definitions may apply to more health care professionals than those intended, leading to several questions about how to comply with this new law.

Continue Reading New Jersey Regulates Out-Of-Network Billing

The opioid epidemic has driven significant legislation this session.  To help our readers track the pending opioid legislation, ML Strategies has created a chart to analyze various provisions of House and Senate bills and their overlap.  The chart compares the provisions of HR 6 – SUPPORT for Patients and Communities Act, passed by the House on June 22, 2018, and the Senate’s combined package of opioid legislation that we previously analyzed here.  The Senate is aiming to pass its opioid package after Labor Day.  If the Senate package passes, the House and Senate need to reconcile differences between the two opioid bills.  As the chart indicates, there are significant differences between the packages, so many issues will need to be resolved before this legislation lands on the President’s desk.

*Madeleine Giaquinto and Olivia Graham also contributed to this post.

On August 9, 2018, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule to overhaul the Medicare Shared Savings Program (MSSP). The proposal, titled “Pathways to Success,” would make significant changes to the accountable care organization (ACO) model at the heart of the program. The proposed changes include a restructuring of the current ACO risk tracks, updating spending benchmarks, increased ACO flexibility to provide care, as well as changes to the electronic health records requirements for ACO practitioners. Continue Reading CMS Proposes to Overhaul the Medicare Shared Savings Program