Firm to Host Life Sciences Day in Frankfurt

Along with the Federal Association of the Pharmaceutical Industry (BPI), the American Chamber of Commerce in Germany and the Federal Association of German In-house Lawyers (BUJ), we cordially invite you to attend our Life Sciences Day on 20 September 2018 in Frankfurt.

The trend for public and private healthcare systems over the past few years has involved strained revenues and declining margins. Finite resources will continue to be taxed with necessary infrastructure projects and an increase in demand, plus advancements in technology and healthcare in general. Investment will need to focus on a growing, and aging, population, along with market expansion, advancements and cost-of-living increases that include greater labour costs. All of this makes it difficult to retain full insurance coverage in an affordable manner, with healthcare providers needing to join forces to attain any advantage in the market.

Our experts, with extensive industry and country experience in the US and Germany, will present the latest developments and look forward to answering your individual questions from your daily business.  More information, including the program agenda, may be found here.



On August 2, 2018, The Federal Communications Commission has unanimously approved a Notice of Inquiry (“NOI”) to establish a $100-million  telehealth pilot program. FCC seeks to identify how the agency can “help advance and support the movement in telehealth towards connected care everywhere and improve access to the life-saving broadband-enabled telehealth services it makes possible.” The NOI seeks public comment: initial comments by September 10 and reply comments by October 10, on various aspects of the contemplated program

Focus – The creation of the program would be to support delivery of broadband enabled telehealth services and applications by low-income Americans and low-income veterans, with a focus on direct delivery of such services and applications to patients beyond the doors of brick-and- mortar health care facilities. To that end, the Commission’s NOI prominently mentions remote patient monitoring and success stories, such as the Veterans Health Administration.

Budget and Program Structure – The Commission expects to set aside up to $100m in total funding from the Universal Service Fund for the pilot program. This would permit, for example, up to 20 health care providers that serve primarily law-income populations to partner with at least one facilities-based broadband provider and apply for a maximum of $5-million in universal service funding for supported services that would be used to deliver these connected care services to eligible patients.

Who Should Be Potential Eligible Health Care Providers? – The NOI seeks comment on establishing a threshold criterion for eligibility that limits the pilot program to health care providers (i.e., clinics and hospitals) that predominantly serve low-income patients. It also asks for potential proxies for identifying such entities (e.g., percentage of Medicaid patients served, location of such entities).

Who Should Be Potential Eligible Broadband Providers? – The NOI expresses a preference for facilities-based eligible telecommunications carriers to participate with health care providers. The Commission believes that a health care provider should have a partnership in place with at least one such broadband provider before applying for funds.

Who Should Be Potential Eligible Low-Income Subscribers? – The Commission seeks comment on limiting participating health care providers’ use of pilot program funding to Medicaid-eligible patients, as well as veterans who qualify based on income for cost-free health care benefits through the Department of Veterans Affairs.

What Services Should Be Supported? – The NOI envisions that the pilot program would help fund broadband connectivity that eligible low-income patients of participating clinics and hospitals would use to receive connected care services (and other services), and broadband connectivity that participating clinics or hospitals need to conduct its proposed connected care pilot project. However, the Commission also asks whether funding should be permitted to support equipment necessary for effective use of the broadband service and end-user devices, such as remote patient monitoring equipment.

Number of Projects, Support Amount and Disbursement? – The Commission seeks comment on whether there should be a set number of projects funded (e.g., no more than 20) and if a $5-million cap on each project is appropriate or larger amounts (e., maximum of $20-million) should be permitted. Finally, the NOI asks how funds should be disbursed, noting existing Universal Service Fund models.

Program Duration? – The Commission asks for comment on the duration of the Program and whether a 2 or 3-year funding period should be adopted.

Other IssuesThe NOI asks about potential federal, state or local regulatory barriers that it should consider in designing the program. It seeks recommendations on how best to ensure that funds are used only for intended purposes. The Commission also raises the question of protecting patient information, while gathering data to measure the effectiveness/success of the pilot. Finally, the NOI seeks comment on how to best measure the program’s effectiveness in improving health outcomes for low-income consumers through increased access to broadband-enabled telehealth services.

Next Steps? – As noted above the FCC will be accepting public comments on these and related questions. We would expect a formal set of proposed rules to follow, perhaps by early next year. We sense a high degree of interest in this proposal, which Commissioner Brendan Carr is leading. Parties interested in helping shape the program on such key issues as, for example, amount of funding per project should be weighing in now, over the comment period. Squire Patton Boggs is fully able to assist in that effort.

Pharma Company Denied C Plea

Many may view a C plea to mean a Corporate Plea. Used infrequently, a C plea restricts discretion of a federal district judge to sentence a criminal defendant. When one federal judge expressed his concerns about a proposed C plea for a pharmaceutical company, he changed the result. In an article published by the American Health Lawyers Association, Rebecca Worthington and Tom Zeno analyze the case. Additional posts about this case can be found here and here.


Healthcare Industry Increasingly Using Trade Secret Litigation to Protect Intellectual Property Rights

A recent report from Lex Machina shows that an increasing number of companies (no doubt including those in the healthcare industry) are turning to the assertion of trade secret claims to protect their intellectual property rights in federal courts – in large part thanks to the passage of the Defend Trade Secret Acts (“DTSA”). Between 2009 and 2016, trade secret suit filings were relatively constant, with an average of approximately 900 cases per year. In 2017 (the first full year the DTSA was in effect), that number increased to 1,134 cases filed, and the filings through the first half of 2018 shows similar growth.

The DTSA, passed in May 2016, allows plaintiffs to file trade secret misappropriation claims in federal court if the claim is “related to a product or service used in, or intended for use in, interstate or foreign commerce.” 18 U.S.C. § 1836(b)(1). Previously, trade secret misappropriation claims were state law claims only, and could be raised in federal court only if federal jurisdiction was otherwise established. Importantly, DTSA provides prospective plaintiffs some powerful remedies, including the ability to obtain ex parte seizure, an award punitive damages, and enhanced damages in certain circumstances. Industries on the cutting edge of healthcare and biotechnology innovations can take advantage of the DTSA and these remedies. Continue Reading

Recent Case Shows How Healthcare Entities Can Protect Themselves While Working With Outside Contractors, Temporary Labor, and Other Third Parties

The “joint employer” doctrine affects healthcare as much as nearly any industry. Healthcare entities frequently rely on outside labor to meet their objectives, such as by contracting with specialty medical providers, hiring temporary administrative staff to fill short-term vacancies, using outside vendors for routine custodial work and maintenance, or through myriad other relationships. In this situation, however, an entity faces a difficult balance between (a) controlling outside workers enough to protect its reputation and good will, achieve quality standards, and otherwise protect its interests while also (b) not exercising so much control that it becomes a joint employer and, therefore, creates unexpected legal liability. Earlier this decade, hardly a week passed without some court or agency interpreting this joint employment doctrine more expansively than before.

Fortunately, several recent decisions have begun scaling back these broad interpretations of joint employment (For example, as we discussed previously, the NLRB is in the process of implementing a new and more balanced joint employment test).  One recent decision shows another court resolving a joint employment question in a way that is evenhanded and rational. In doing so, the court provided important guidance for entities that use or rely on outside workers. Continue Reading

House Panel Examines 340B Legislative Reforms

On Wednesday, July 11, 2018, House lawmakers again signaled their intent to reform the US Department of Health and Human Services (HHS), Health Resources and Services Administration’s (HRSA) 340B Drug Pricing Program (340B) during an Energy and Commerce (E&C) Subcommittee on Health hearing.

Since 2015, both E&C and the Senate Health, Education, Labor, and Pensions Committee (HELP) have conducted hearings to examine 340B. Additionally, E&C issued a January 2018 report that details potential congressional and agency actions to improve 340B administration.

The federal program, which permits covered entities that serve a certain threshold of low-income patients to purchase discounted outpatient drugs, still enjoys broad bipartisan support despite calls by some members of Congress and the Trump Administration to implement additional oversight. Covered entities include certain hospitals, as well as federally supported health centers and specialized clinics that meet defined criteria. Established in 1992, 340B has expanded to comprise nearly half of America’s hospitals, many of which joined after the Affordable Care Act broadened eligibility.

Read the full article on our website.

Recent Guidance by ONC and SAMHSA Sheds Light on Compliance Requirements for 42 CFR Part 2

In the face of the ongoing opioid crisis in the United States, the Office of the National Coordinator for Health Information Technology (“ONC”) and the Substance Abuse and Mental Health Services Administration (“SAMHSA”) recently released two fact sheets to clarify how the requirements of 42 CFR Part 2 apply in different provider contexts, including via electronic health information exchange (“HIE”). The Part 2 regulations were initially promulgated in 1975 to ensure the confidential treatment of records relating to the identity, diagnosis, prognosis or treatment of patients in federally assisted programs for substance use disorders (“SUD”). SAMHSA attempted to modernize the regulations in 2017, in part to account for the many advances in healthcare technology and care delivery models that impact how patient records are transmitted and maintained. However, many stakeholders continue to call for further changes, and a number of bills have been introduced in the House and Senate to further align the Part 2 regulations with HIPAA for the purposes of healthcare treatment, payment and operations.

The new Fact Sheets are intended to help remove barriers to choosing or providing appropriate SUD treatment and to guide stakeholders on how to access and securely share SUD-related health information with the patient’s consent. They are the first guidance documents that SAMHSA has issued since the Part 2 regulations were amended last year. Although they largely restate material in the Preamble of the Final Rule, they contain a series of useful fact patterns that illustrate when and how patient consent should be obtained, including by clarifying how a general designation in a patient consent form works in practice. The key takeaways and insights from the Fact Sheets, which are particularly helpful for stakeholders in mixed-use facilities, integrated care settings, or utilizing HIEs, are summarized below. Continue Reading

CMS “Regulatory Sprint to Coordinate Care” Seeks Input to Lessen the Regulatory Burden of the Stark Law

Late last month, the Centers for Medicare & Medicaid Services (“CMS”) issued a request for information (“RFI”) seeking input regarding the Medicare physician self-referral law and its implementing regulations (“Stark Law”) and how it may prevent or inhibit care coordination amongst healthcare providers. As part of CMS’s broader “Regulatory Sprint to Coordinated Care” initiative, the RFI’s goals are, in part, to help identify the Stark Law’s regulatory requirements or prohibitions that may impede coordinated care, and to help CMS assess the necessity of these obstacles. To be assured of consideration, comments must be received by CMS no later than 5:00 p.m., August 24, 2018. Continue Reading

DC Circuit Rejects HHS Rule Barring Hospital Medicare Appeals Challenging Longstanding Erroneous “Predicate Facts”

On June 29, 2018, the DC Circuit ruled that HHS could not apply in PRRB appeals a 2013 “reopening” regulation, which purports to bar the adjudication of “predicate facts” beyond 3 years after the facts had been determined. St. Francis Medical Center v. Azar (D.C. Cir. June 29, 2018). The court held that the agency’s reopening regulation, although stating that such predicate facts could not be considered outside the 3-year window, applies only where agency decision makers revisit their own determinations and does not apply in appeals from one level of the agency to another. A concurrence by Judge Kavanaugh found further that “it would seem to be the very definition of arbitrary and capricious for HHS to knowingly use false facts when calculating hospital reimbursements. That is particularly so when those erroneous facts cost hospitals hundreds of millions of dollars. That is real money.” This DC Circuit decision applies nationwide to restore hospital procedural rights to seek correction of baseline errors that may repeatedly cause underpayments years down the line. Continue Reading

DOL Issues Final Rule Expanding Access to Association Health Plans

On June 21, 2018, the US Department of Labor (DOL or the Department) published its final rule, amending the definition of “employer” under section 3(5) of the Employee Retirement Income Security Act (ERISA) to allow for the establishment of group or association health plans (AHPs) (Final Rule). Similar to a corresponding proposed rule issued earlier this year (the Proposed Rule,), the Final Rule broadens the criteria under ERISA for determining when and how employers may form associations to offer group health plans to multiple employers and self-employed individuals.

According to the DOL, the Final Rule is intended to expand access to group health coverage by permitting businesses, sole proprietors and self-employed to form associations to sponsor AHPs based on common geography, industry or trade, if certain criteria are met.

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