The Advanced Medical Technology Association (AdvaMed) – the national industry association of medical technology manufacturers – recently issued an updated Code of Ethics on Interactions with Health Care Professionals (HCPs) (the AdvaMed Code or Code). Last revised in 2009, AdvaMed’s updated Code will go into effect January 1, 2020. The Code speaks to the evolving … Continue Reading
The Office of Inspector General (OIG) recently gave the green-light on a medical device manufacturer’s proposed warranty program, wherein the company would provide a refund to the hospital at which a patient underwent joint replacement surgery using the company’s knee or hip implant and related products, if the patient was readmitted within 90 days because … Continue Reading
The Office of Inspector General (OIG) of the Department of Health Human Services (HHS) is seeking input on Medicare and State Health Care Programs: Fraud and Abuse; Request for Information Regarding the Anti-Kickback Statute and Beneficiary Inducements CMP. The OIG describes this request for information (RFI) as part of HHS’s endeavor “to transform the health … Continue Reading
The newly-enacted Bipartisan Budget Act of 2018 includes numerous Medicare, Medicaid, and other policy and payment provisions impacting health providers and manufacturers. Of particular note, the new law: increases Medicaid rebate obligations with respect to line extension drugs; changes manufacturer discount obligations in the Medicare Part D “donut hole”; repeals the Independent Payment Advisory Board … Continue Reading
For some time, we have been reporting on issues involving federal government scrutiny of physician-owned distributors (“PODs”). From our blog post here on the Department of Health and Human Services Office of Inspector General’s (“OIG”) issuance of the March 2013 OIG Special Fraud Alert (“Special Fraud Alert”), to our post here on the Reliance Medical … Continue Reading
A False Claims Act (“FCA”) retaliation claim, 31 U.S.C. 3730(h), filed January 26, 2016 in federal district court in Oregon, provides a perfect example of the type of challenging cases confronting health care employers today. Pediatrician Robert Dannenhoffer, MD, the former CEO of a joint venture between a hospital and physicians’ group, alleges that he … Continue Reading
We have been reporting for some time on issues involving the Office of the Inspector General (OIG) scrutiny of physician-owned distributors (PODs). In March 2013, we analyzed an OIG Special Fraud Alert on PODs and in October we reported on an interesting challenge to the Fraud Alert filed by a medical device manufacturer in the U.S. District Court for the Central District of California. That suit argued that the Fraud Alert unfairly and unconstitutionally burdened the plaintiff's First Amendment rights of free speech and due process. In this post, we report on the disposition of that case, and several other related POD developments.… Continue Reading
By Elizabeth B. Carder-Thompson on Posted in Health Care
This post was written by Elizabeth Carder-Thompson.
On October 8, 2013, Reliance Medical Systems, LLC, filed a complaint in the U.S. District Court for the Central District of California, seeking a declaration that an Office of Inspector General (OIG) Special Fraud Alert on physician-owned distributors (PODs) unfairly and unconstitutionally burdens First Amendment rights of free speech and due process.
Reliance describes itself as "a design company that collaborates with spine surgeons to design highly customized spinal implant devices and surgical tools." It states it had physician owners from its beginning in 2006, characterizing this as a business model that "maximizes and optimizes physician design input." However, in 2012, before issuance of the Fraud Alert, it "moved away from the physician-owned entity business model, after careful consideration and out of an abundance of caution." Interestingly, in a separate part of the complaint, Reliance allows that "the OIG is currently investigating Reliance, and its physicians with whom Reliance previously communicated." The Complaint goes on to explain that it now wishes to return to a physician-owned business model, but that the Fraud Alert's characterization of PODs as "inherently suspect" under the federal anti-kickback statute is chilling its ability to speak with prospective physician owners. It also expresses concern about future OIG investigations, and about reluctance by hospitals and ambulatory surgical centers to enter contracts with it, for fear that they themselves may be "at risk" under the Fraud Alert for doing business with physician-owned entities.
The complaint provides a colorful chronology of events leading up to the OIG's issuance of the POD Fraud Alert.… Continue Reading
In preparation for data collection to begin under the Physician Payment Sunshine Act Final Rule on August 1, 2013, the Centers for Medicare & Medicaid Services (CMS) released yesterday the list of teaching hospital covered recipients to which payments and other transfers of value must be reported by applicable drug and device manufacturers. The list, … Continue Reading
Referencing what it deems a "proliferation" of physician-owned distributors (PODs), on March 26, 2013, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) released a Special Fraud Alert identifying significant concerns with such entities under federal anti-kickback principles.1 For purposes of the Alert, the OIG defines a POD as "any physician-owned entity that derives revenue from selling, or arranging for the sale of, implantable medical devices," including "physician-owned entities that purport to design or manufacture, typically under contractual arrangements, their own medical devices or instrumentation." Specifically, the OIG describes in somewhat unusual detail the multiple "attributes and practices" of PODs that the OIG believes "produce substantial fraud and abuse risk and pose dangers to patient safety."
Notably, the Alert is focused on PODs that derive revenue from selling, or arranging for the sale of, implantable medical devices that are ordered by physician-owners for use in procedures that physician-owners "perform on their own patients at hospitals or ambulatory surgical centers (ASCs)." However, the OIG states that "the same principles would apply when evaluating arrangements involving other types of physician-owned entities."… Continue Reading
On February 1, 2013, the Centers for Medicare & Medicaid Services (CMS) of the Department of Health and Human Services (HHS) released the long-awaited Final Rule to implement the “Sunshine” provisions of the Affordable Care Act of 2010 (ACA). The Sunshine provisions – intended to provide increased transparency on the scope and nature of financial … Continue Reading
On Wednesday, November 21, 2012, Massachusetts' Public Health Council ("Council") approved amendments to the State's Marketing Code of Conduct, which restricts certain gifts and payments by pharmaceutical and medical device manufacturers to Massachusetts health care practitioners ("HCPs") and requires disclosure of payments and transfers of value to HCPs. The final regulations, effective as of December 7, 2012, primarily adopt the emergency regulations issued by the State in September but make a few substantive changes.… Continue Reading
On September 19, 2012, the Massachusetts Public Health Council approved emergency amendments to the State's Marketing Code of Conduct regulations, 105 CMR 970.000, which restrict certain gifts and payments by pharmaceutical and medical device manufacturers to Massachusetts health care practitioners ("HCPs") and require disclosure of payments and transfers of value to HCPs. The regulations, effective as of September 19, 2012, follow amendments to the underlying statute, Massachusetts General Laws, Chapter 111N, signed into law in July by Governor Deval Patrick as part of the FY2013 State Budget.… Continue Reading
As drug and device manufacturers continue to await final regulations and subsequent implementation of the federal Physician Payment Sunshine Act, passed as part of the Affordable Care Act, Massachusetts has relaxed its similar state law banning the provision by manufacturers of gifts to health care practitioners (“HCPs”) and requiring disclosure of payments and transfers of … Continue Reading
The New Hampshire State Senate held a hearing on April 19, 2012 regarding HB 1725, a new measure that would prohibit all health care practitioners from prescribing or referring any U.S. Food and Drug Administration class II or class III implantable medical device if the practitioner stands to "profit indirectly or directly from the sale of [the] medical device by any supplier in which the health care practitioner has a direct or indirect ownership interest."… Continue Reading
On March 29, 2012, the New Hampshire House of Representatives recommended for passage HB 1725. If passed, HB 1725 would prohibit all health care practitioners from prescribing or referring any U.S. Food and Drug Administration class II or class III implantable medical device if the practitioner stands to profit, directly or indirectly, from the sale of the device, or from performing any procedure involving the device.… Continue Reading
On Friday, October 7, 2011, the Centers for Medicare & Medicaid Services ("CMS") and the Food and Drug Administration ("FDA") (collectively, the "Agencies") announced they were soliciting nominations from sponsors of medical devices to participate in the Agencies' parallel review pilot program. The Agencies officially published a Federal Register notice announcing the program October 11, 2011 (the "Notice"), with an effective date of November 10, 2011, although the Agencies began accepting nomination submissions October 7.… Continue Reading
Notably absent from last month's Department of Health and Human Services Semiannual Regulatory Agenda was any indication of where the Centers for Medicare and Medicaid Services ("CMS") and the Food and Drug Administration ("FDA") stand with respect to their notice with request for comments, issued last fall, on the proposed parallel review process for medical products. While CMS and FDA officials confirmed that they are currently reviewing comments submitted during the review period, they declined to speculate on when they intend to act. The comments submitted, however, provide insight into industry views on this important issue, including widespread discontent with the approval mechanisms currently available. We have undertaken a review of all of the comments submitted and extracted the eight main concerns cited in the following analysis.… Continue Reading
On May 26, 2011, Vermont Governor Peter Shumlin signed into law Senate Bill 104 ("S.104"), significantly modifying Vermont law banning the provision by manufacturers of gifts to health care providers and requiring disclosure of certain allowable expenditures and gifts to health care providers (18 V.S.A. § 4631a and 18 V.S.A. § 4632). S.104 follows amendments made to the Vermont gift ban and disclosure law enacted just last year. This Client Alert includes a summary of the modifications pursuant to S.104. Except as otherwise noted, the changes are effective July 1, 2011.… Continue Reading
On December 13, 2010, the United States District Court for the District of Columbia affirmed the decision of Kathleen Sebelius, Secretary of the Department of Health and Human Services (the "Secretary") excluding three former pharmaceutical executives for twelve years from participation in Medicare, Medicaid, and all other federal health care programs. The exclusion - the latest weapon in governmental assaults on pharmaceutical company wrongdoing - was imposed by the Office of Inspector General of the Department of Health and Human Services ("OIG"). The executives, who included the company's former general counsel, were excluded notwithstanding the fact that they asserted no knowledge of the misbranding conduct for which their former employer, Purdue Frederick Company ("Purdue"), previously settled with the government.
The decision illustrates the government's enhanced focus on individual liability and punishment in the context of fraud and abuse by health care entities, and it represents a significant development in enforcement activity in this area.… Continue Reading
On October 20, 2010, the Office of Inspector General (OIG) of the Department of Health and Human Services issued significant new guidance for implementing its permissive exclusion authority under section 1128(b)(15) of the Social Security Act. Section 1128(b)(15) specifically authorizes the OIG to exclude an owner, officer or managing employee of a sanctioned entity, i.e., health care provider, supplier, or manufacturer, from participation in federal health care programs. The OIG's new guidance sets out non-binding factors that the OIG intends to consider in deciding whether to impose exclusion on owners, officers and managing employees.… Continue Reading
This post was also written by Robert J. Hill and Jennifer A. Goldstein. In April 2010, Reed Smith provided an extensive analysis of the recently-enacted health reform legislation, H.R. 3590, the Patient Protection and Affordable Care Act (PPACA), as amended by H.R. 4872, the Health Care and Education Reconciliation Act of 2010 (Reconciliation Act). In this analysis, … Continue Reading
We want to alert our manufacturer clients to the potential importance of a specific provision included in our analysis of the recent health care reform legislation. As we note at page 108 of our memorandum:
Medicaid Exclusion from Participation Relating to Certain Ownership, Control, and Management Affiliations (Sec. 6502)
[T]his provision requires Medicaid agencies to exclude individuals or entities from participating in Medicaid for a specified period of time if the entity or individual owns, controls, or manages an entity that: (1) has failed to repay overpayments during the period as determined by the Secretary; (2) is suspended, excluded, or terminated from participation in any Medicaid program; or (3) is affiliated with an individual or entity that has been suspended, excluded, or terminated from Medicaid participation.… Continue Reading
On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (PPACA), a sweeping measure designed to expand access to health insurance, reduce health care spending (particularly in the Medicare program); expand federal fraud and abuse authorities and transparency requirements; impose new taxes and fees on health industry sectors; and institute a variety of other health policy reforms. The President also signed a second bill into law on March 30, 2010, the Health Care and Education Reconciliation Act of 2010 (Reconciliation Act), which includes a series of "fixes" to the PPACA, including substantive changes to the PPACA's provisions regarding Medicare prescription drug coverage, Medicare Advantage and fee-for-service payments, Stark law self-referral policy, and Medicaid matching payments, among many others. Within the thousands of pages of the new laws are numerous provisions that will have a direct and material impact on nearly every component of the health care delivery and financing systems in the United States, including health insurers, health care providers, and manufacturers of pharmaceuticals and medical devices, as well as employers, taxpayers, and patients. Moreover, the impact of some of these provisions will be felt immediately, as certain provisions are effective upon enactment, and some have January 1, 2010 effective dates. Reed Smith has prepared a major Alert concentrating on those PPACA provisions we believe are of most interest to health care providers and medical device and pharmaceutical manufacturers.… Continue Reading