Life Sciences Legal Update : Life Sciences Lawyers & Attorneys : Reed Smith Law Firm : Healthcare, Food and Drug Law, Biotechnology, Privacy, Product Liability

As reported by our sister site, Health Industry Washington Watch, on Wednesday the House Energy and Commerce Health Subcommittee will hold a hearing entitled, "Drug Safety: An Update from the FDA." At the hearing, the FDA will detail its current challenges and successes in the area of drug safety. Joshua M. Sharfstein, M.D., FDA Principal Deputy Commissioner, is slated to testify.

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This post was written by Elizabeth B. Carder-Thompson and Debra A. McCurdy.

The Centers for Medicare & Medicaid Services (CMS) has issued new "Telemarketing FAQs" to supplement the Office of Inspector General's (OIG) recent revisions to its Special Fraud Alert on Telemarketing by Durable Medical Equipment Suppliers. As you may recall, in January 2010, the OIG amended the Special Fraud Alert to add a warning about suppliers contacting a beneficiary before the supplier receives written beneficiary consent, as it may violate the statutory provision that prohibits Durable Medical Equipment (DME) suppliers from making unsolicited telephone calls to Medicare beneficiaries regarding the furnishing of a Medicare-covered item. Specifically, the OIG stated that it "has also been made aware of instances when DME suppliers, notwithstanding the clear statutory prohibition, contact Medicare beneficiaries by telephone based solely on treating physicians’ preliminary written or verbal orders prescribing DME for the beneficiaries." According to the OIG, the "physician’s preliminary written or verbal order is not a substitute for the requisite written consent of a Medicare beneficiary."

In response to this new language, Reed Smith contacted the OIG to discuss the adverse impact this policy would have on timely beneficiary access to medically necessary equipment ordered by a physician, since some suppliers call a beneficiary to arrange for equipment deliveries upon receiving an initial physician verbal order. The OIG has just sent us a copy of new CMS Telemarketing FAQs that seek to clarify certain aspects of the revised Special Fraud Alert. Notably, CMS clarifies that there are circumstances in which a supplier may contact a beneficiary based on receipt of a physicians' order if the physician contacts the supplier with the beneficiary's knowledge:

Question 3: Is a supplier contacting the beneficiary based on the receipt of a physician order considered an “unsolicited” contact?

Answer 3: If a physician contacts a supplier on behalf of a beneficiary with the beneficiary’s knowledge, and then a supplier contacts the beneficiary to confirm or gather information needed to provide that particular covered item (including delivery and billing information), then that contact would not be considered “unsolicited.” Please note that the beneficiary need only be aware that a supplier will be contacting him/her regarding the prescribed covered item, recognizing that the appropriate supplier may not have been identified at the time of consultation.

On the other hand, if the beneficiary is not aware that the physician would be contacting the supplier on the beneficiary's behalf, the contact may be prohibited.

Question 4: What if a supplier contacts the beneficiary based solely on the physician order (and therefore the contact is without the beneficiary’s knowledge that the physician would be contacting a supplier on the beneficiary’s behalf)?

Answer 4: Then that contact would be considered “unsolicited” and, depending on the facts and circumstances of the particular case, may be prohibited.

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This post was written by Rachel Cutler Shim, John D. Martini, Dennis R. Bonessa, William H. Nichols and Laurie S. DuChateau.

On January 29, 2010, the U.S. Departments of Labor, Health and Human Services and the Treasury jointly issued interim final regulations implementing the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 ("MHPAEA"). The MHPAEA, as implemented by the interim final regulations, greatly expands the parity standards of its predecessor, the Mental Health Parity Act of 1996 ("MHPA 1996").

The MHPAEA, as implemented by the interim final regulations, expands on the requirements of the MHPA 1996 and introduces new rules that prohibit group health plans from creating disparities between medical/surgical benefits and mental health benefits, as well as substance-use disorder benefits. To learn more about how MHPAEA impacts group health plans, read our full alert.

For more information, please contact one of the authors: Rachel Cutler Shim, John D. Martini, Dennis R. Bonessa, William H. Nichols and Laurie S. DuChateau.

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This post was written by Elizabeth Carder-Thompson.

Last week, in my capacity as president of the American Health Lawyers Association, I attended the first National Summit on Health Care Fraud, a joint undertaking by the U.S. Department of Health and Human Services and the U.S. Department of Justice. The conference brought together private sector leaders, law enforcement personnel, and health care experts as part of the Obama Administration’s coordinated effort to fight health care fraud. This was the first national gathering on health care fraud between law enforcement and the private and public sectors.

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This post was written by Robert H. Jackson.

The Federal Communications Commission (“FCC”) has proposed changes to its Telephone Consumer Protection Act (“TCPA”) rules that would conform to the Federal Trade Commission’s Telemarketing Sales Rule (“TSR”). The primary change in the regulations would affect the sending of prerecorded messages (a/k/a “robocalls”) by barring them even to existing customers without first obtaining prior written consent. At first blush, this seems routine, but because of differences in the FCC’s and FTC’s statutory jurisdiction, there are complicated implementation issues that could trap unsuspecting companies. Other key issues for the health care industry is whether the FCC should create an exemption for prerecorded messages that are subject to Health Insurance Portability and Accountability Act (“HIPAA”) and, if so, how such exemption should be implemented. For more information about these changes, please read our client alert written by Robert Jackson.

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As noted in our September 2009 post discussing China’s new National Essential Drug System (NEDS), China continues to make progress in its healthcare reform efforts. However, new national drug lists and price caps designed to provide low-cost drugs to the masses, have at the same time raised questions about the program’s economic impact on local and multinational pharmaceutical manufacturers.

To learn more about how China’s healthcare reform package and how it may affect your company, we invite you to read Reed Smith Life Sciences Partner Gordon Schatz and ZS Associates Inc. consultant Patrick Nowlin’s “Drugs for the Masses,” recently published by China Business Review.

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This post was written by Steven P. Murphy.

Responding to efforts by a number of industry groups, on December 28, 2009, the U.S. Consumer Product Safety Commission ("CPSC") posted a Federal Register notice announcing its continuation of the stay of enforcement of the third-party laboratory testing and certification required under section 14 of the Consumer Product Safety Improvement Act of 2008 ("CPSIA"). The stay was continued until February 10, 2011. The continued stay involves a discrete group of products, including children's toys and child care products with banned phthalates, toys subject to ASTM's F-963 standards, baby walkers, electrically operated toys, youth all-terrain vehicles, carpets and rugs, vinyl plastic film, and children's sleepwear. Most importantly, the stay was continued for the third-party testing and certificate of the lead content limit that applies to all children's products.

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This post was written by Daniel A. Cody, Paul W. Pitts and Alison B. Riddell.

Although California legislators devoted a significant amount of time and resources to addressing the state’s budget shortfall and the economic recession, the 2009 legislature debated and passed a surprising number of bills related to health care, many of which will become effective January 1, 2010. New laws impacting California health care providers include:

• Amendments to the 2008 law requiring certain health care providers to disclose unlawful and unauthorized uses or disclosure of medical information
• Laws requiring the Department of Public Health [www.cdph.ca.gov] to more timely process and approve applications for new or modified hospital outpatient services
• Provisions impacting the delivery of radiologic and diagnostic imaging services, such as permitting physician assistants to provide fluoroscopy services under the supervision of a physician
• Amendments to California’s False Claim Act that expand the types of claims subject to the law, extend the state’s prosecutorial authority, and increase the penalties for violating the statute
• Laws stating that long-term care providers will be subject to new ownership disclosure requirements
• Passing Assembly Bill 215, which makes California one of the first states to recognize and incorporate the controversial Five-Star Quality Rating for nursing facilities as created by the Centers for Medicare & Medicaid Services

For the full summary of major legislation impacting California physicians, hospitals, nursing facilities, and other licensed health care facilities, read our client alert.

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Ralph Tyler has been appointed the new FDA General Counsel. The announcement was made today by FDA Commissioner, Dr. Margaret A. Hamburg. Mr. Tyler will join the Office of the Chief Counsel in Rockville, MD on January 19, 2010. Stepping down will be Acting Chief Counsel Michael Landa, who will return to the Center for Food Safety and Nutrition (CFSAN) as Deputy Director for Regulatory Affairs.

Mr. Tyler is currently the Insurance Commissioner of the State of Maryland. Previously he served as Chief Legal Counsel to Maryland Governor Martin O’Malley. Prior to that, Mr. Tyler served as the Deputy Attorney General, the Chief of Litigation, and Assistant Attorney General in the Maryland Attorney General’s office between 1982 and 1996. Mr. Tyler also spent several years as a partner at Hogan & Hartson, LLP. He holds a B.A. from the University of Illinois, a J.D. from Case Western Reserve University, and a LL.M. from Harvard University. 

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