For Your Eyes Only: Anticompetitive Collusion at a UK Hospital

Last week the UK Competition and Markets Authority (CMA) published its decision to fine Spire and 7 consultants ophthalmologists operating in its Macclesfield hospital for fixing “the level of the initial consultation fees charged by the Ophthalmologists at the Hospital” (para 3.34).

This is a classic ‘price-fixing’ decision against ophthalmologists who agreed to charge the same fee (£200) for an initial consultation. However, and more importantly, this decision comes as a stark reminder to Hospitals not to regulate the pricing policy of their external consultants – even if it is for selfless reasons! Indeed, although the CMA recognised that “Spire does not itself provide initial consultations in competition with the ophthalmologists”, Spire received the largest (by far!) fine of £1.2 million, whilst the individual fine for each consultant did not exceed £3,000. Continue Reading

Senators Announce Bipartisan Bill Requiring Pharmaceutical Supply Chain Report

U.S. Senators Marco Rubio (R-FL) and Elizabeth Warren (D-MA) recently announced plans to cosponsor S. 4191, the United States Pharmaceutical Supply Chain Review Act. According to bill text released by Senator Warren’s office, the bill directs the Federal Trade Commission (FTC) and the Secretary of the Treasury, in consultation with the Secretary of the Treasury, and acting through the Committee on Foreign Investment in the United States, to study the U.S. pharmaceutical supply chain. Specifically, within one year of enactment, the agencies identified would be required to study and submit an assessment of:

    • The U.S. pharmaceutical supply chain “and the effect of concentration and reliance on foreign manufacturing within that industry,”
    • How foreign investment impacts U.S. “domestic capacity to produce drugs and active and inactive ingredients of drugs,”
    • Whether foreign investment in U.S. genome sequencing technology affects “the capacity to sequence or store DNA in the United States,” and
    • An accounting of CFIUS reviews over the past ten years of foreign investment in the pharmaceutical and genome sequencing industries.

The bill was introduced by Senator Warren and referred to the Senate Committee on Banking, Housing, and Urban Affairs. It appears the senators are still working to gather cosponsors for the bill.

Senators Rubio and Warren also released a one-page summary of the bill. The summary cites a 2019 annual report conducted by the U.S.-China Economic Security Review Commission that found nearly 80 percent of active pharmaceutical ingredients (APIs) are imported from abroad. The Senators conclude that an “overreliance [on APIs] leaves our supply chain of critical drugs used by millions of Americans vulnerable to disruption – whether by accident or by design.”

Recent Supreme Court Decision Creates Basis For Challenge To HHS’s Rescission Of Anti-Discrimination Protections

Most readers are likely familiar with the landmark decision issued by the U.S. Supreme Court last week, in which the Court held that Title VII prohibits discrimination on the basis of sexual orientation and transgender status. (Read more about this decision here.) That decision not only provided important clarification to the scope of protections for the LGBT community, but it may also create a basis for challenges to a recent rule by the Trump administration’s Department of Health and Human Services (HHS).

As background, shortly after the Patient Protection and Affordable Care Act (ACA) became law, the Obama HHS issued a rule clarifying that the ACA prohibits discrimination on the basis of gender identity and transgender status. Then, earlier this month, the Trump HHS published its own rule that, once effective, would remove those anti-discrimination provisions. Three days later, the Supreme Court issued the above-referenced decision, and explicitly held that Title VII prohibits discrimination on the basis of transgender status.

This decision leaves the HHS’s new rule vulnerable to challenge. Several groups already have filed legal actions seeking to block the HHS from removing those bars on discrimination. The HHS has not yet changed course, and is asserting that the ACA’s specific language and applicability to healthcare render it distinguishable from the cases at issue before the Supreme Court (which involved Title VII and its applicability in the context of employment). Nevertheless, the language of the Supreme Court’s decision, and the Supreme Court’s opinion that “sex” discrimination includes discrimination on the basis of transgender status, create a significant reason to believe that the HHS rule will be overturned. The outcome of this litigation will have important consequences for healthcare organizations, insurers, and patients, and it may ultimately clarify protections that exist in other settings as well.

Growing Bullseye on Skilled Nursing Facilities

Although nursing homes appreciate the recent release of $4.9 billion in financial assistance, the bullseye on them continues growing.  Troubles that preceded the COVID-19 crisis have gotten worse for facilities caring for high risk seniors.  They face scrutiny over death rates from COVID-19, as well as how they will use relief money.

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Redefined by COVID-19 and Shaped by Current Events: What’s Ahead for US Federal Appropriations

Attention in Congress will soon turn to the annual appropriations process and passage of fiscal year 2021 spending bills.  In addition to funding the entire US government each year, the 12 Appropriations Committee bills in the House and Senate shape federal public policy that touches every person and business in the United States.  The new fiscal year begins on October 1.

In the coming weeks and months, standing committees in the House and Senate will be focused on must-pass legislation including the National Defense Authorization Act, the Water Resources Development Act, a surface transportation bill, and passage of appropriations bills for fiscal year 2021.

New COVID-19 health and safety protocols on Capitol Hill are presenting Congress with a series of unique challenges.  The legislative process is going to look very different as compared to even several months ago.  See a discussion here on our Capital Thinking Blog.

CARES Act Medicare Money – View From Former Prosecutors

The CARES Act requires Medicare providers to attest to multiple certifications.  Former prosecutors examine how law enforcement may scrutinize these certifications. Marisa Darden, David Maria, and Thomas Zeno also offer tips on how providers who receive CARES Act funds can insulate themselves from scrutiny.  Their article can be found here.


Updated HHS Guidance on Provider Relief Fund Payments Could Help Providers Navigate Coming Oversight

On May 29, and June 2, the Department of Health and Human Services (HHS) updated its “Provider Relief Fund FAQs” on disbursements made to providers from the $175 billion Provider Relief Fund initially established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, for expenses and lost revenues attributable to the coronavirus pandemic.  HHS’s updated guidance includes helpful details on the types of coronavirus-related costs and lost revenues for which providers may use Provider Relief Fund disbursements.  But the updates also reemphasizes that “HHS will have significant anti-fraud monitoring of the funds distributed, and the Office of Inspector General will provide oversight … to ensure that Federal dollars are used appropriately.”  HHS will soon be examining the first batch of quarterly reports on use of funds, due by July 10, from providers that received over $150,000 of CARES Act funding.  And HHS isn’t the only one watching, as the media and Congress have already questioned the methodology behind the $77 billion in disbursements HHS has made thus far.

Given this environment of heightened scrutiny, hospitals and providers should strive to rigorously monitor and account for their proper receipt and use of the Provider Relief Fund payments.  While pandemic-related losses and expenses likely dwarf total payments so far (e.g., total losses through July are estimated to top $200 billion), some areas of caution include identifying where potentially overlapping funding sources might be available and HHS’s ban on balance billing for coronavirus-related care.  As with any other important task, an ounce of prevention in using and documenting Provider Relief Fund payments will be worth a pound when trying to cure any agency or committee investigation. Continue Reading

The Time is Now for Providers to Apply for Some of the Remaining $130 Million Available Under the FCC’s COVID-19 Telehealth Program

As previously reported, Congress and Department of Health and Human Services (HHS) have removed longstanding regulatory barriers to the broad deployment of telehealth for general care during the COVID-19 pandemic. In parallel, the Coronavirus Aid, Relief, and Economic Security (CARES) Act has established the Federal Communication Commission (“FCC”) COVID-19 Telehealth Program, (the “FCC Program”) to reimburse providers for expenditures in furtherance of building out telehealth programs to meet this growing demand.

Details of the program are summarized here.  The FCC Program covers many types of nonprofit and public providers and a variety of expenditures (e.g., for connected devices or telecom services). But, if you are a provider interested in seeking reimbursement through the FCC Program, you should do so quickly as $63 million of the Program’s total $200 million has already been spoken for. Once the funds have been consumed, there is no indication they will be replenished. Continue Reading