Foley Hoag LLP

SUMMARY

The last decade has seen the creation of complex genomic tests, sometimes as the outcome of tens of millions of dollars of research, designed from ground up to solve a recognized clinical problem. These tests, which range in price from $500 to $3000, are the “poster child” for the potential as well as the challenges when genomics and advanced bioinformatics are brought together and enter the clinic. According to a number of published studies, at least some tests in these categories can be net cost-saving in real-world scenarios, in addition to improving medical decision-making.

In March 2012, the local Medicare contractor for all California-based laboratories plans to launch an elaborate program for genomic test evaluation, coding, and pricing. This essay discusses major features of the program, as they have been released up to November 2011. The program is likely one of the most distinctive strategic policy efforts proposed by a Medicare contractor in the forty-five year history of the Medicare program. 

SUMMARY

Overview

Yesterday, the United States Supreme Court granted certiorari (meaning it has agreed to hear an appeal) on three petitions concerning the constitutionality of the Affordable Care Act (“ACA”). Given the Supreme Court’s timeline for the filing of briefs, oral argument will likely be scheduled for the end of March or beginning of April 2012. The Supreme Court has set aside five and a half hours for oral arguments on four different issues. Under this timeline, the Court’s final ruling will likely be handed down at the end of June 2012, just before the Court recesses for the summer.

Key Points About The Decision

The Supreme Court has complete discretion to decide which cases (and which issues raised by those cases) it will hear. Each year the Court receives approximately 10,000 certiorari petitions, of which it hears between 80 and 100. A petition must receive the vote of four Justices to be granted certiorari. [continues...]

SUMMARY

The Affordable Care Act (§ 9008, as amended by § 1404 of the Reconciliation Act), established an annual fee that will be imposed on covered entities that manufacturer or import branded prescription drugs.

The Department of Treasury recently issued guidance on this new annual fee, available at http://www.irs.gov/pub/irs-drop/n-10-71.pdf . The guidance describes a proposed methodology for calculating the fee, how the IRS will use the methodology to provide covered entities with a preliminary 2011 fee calculation, and solicits public comments. Comments must be submitted by June 2, 2011.

IRS Form 8947, which is referenced in the guidance, is available at http://www.irs.gov/pub/irs-pdf/f8947.pdf

SUMMARY

On June 22, 2010, the Departments of the Treasury, Labor, and Health and Human Services issued interim final regulations implementing the rules for group health plans and health insurance coverage in the group and individual markets under provisions of the Patient Protection and Affordable Care Act regarding preexisting condition exclusion, lifetime and annual dollar limits on benefits, rescissions, and patient protections. These interim final regulations are effective 60 days after publication in the Federal Register. Comments are due on or before 60 days after publication.

SUMMARY

On June 18, 2010, the Office of the National Coordinator for Health Information Technology (ONC) issued a final rule establishing a temporary certification program to test and certify health information technology (HIT), including electronic health records (EHRs). This temporary certification program will be used to ensure that “Certified EHR Technology” is available for adoption by eligible professionals, eligible hospitals and critical access hospitals (CAHs) for purposes of qualifying for incentives under the Health Information Technology for Economic and Clinical Health (HITECH) Medicare and Medicaid EHR Incentive Programs, as established under the American Recovery and Reinvestment Act of 2009 (Pub. L. 111–5).

SUMMARY

On June 14, 2010, the Departments of Treasury, Labor, and Health and Human Services published the Interim Final Rules for group health plans and health insurance coverage relating to status as a grandfathered health plan under the Patient Protection and Affordable Care Act (PPACA) with request for comments. Comments are due on or before 60 days after publication in the Federal Register.

SUMMARY

Transparency Initiative

In June 2009, Dr. Margaret Hamburg, the newly appointed Commissioner of Food and Drugs, announced the Food and Drug Administration (“FDA” or “Agency”) Transparency Initiative and created the FDA Transparency Task Force to carry out the Initiative. The goals of the initiative were in keeping with President Obama’s January 2009 memorandum calling for “creating an unprecedented level of openness in Government” to “promote accountability and provide information for citizens about what their Government is doing.”    [continues...]

SUMMARY

As initially enacted, standard prescription drug coverage under Medicare Part D contains a “gap” in coverage during which a Part D enrollee is fully liable for their prescription drug costs. Social Security Act § 1860D-2(b)(3)(A), 42 U.S.C. § 1395w-102(b)(3)(A). In plan year 2010, once a beneficiary incurs $2,830 in Part D spending (split between the enrollee and the plan), Part D coverage will cease until the beneficiary incurs true out-of-pocket spending of $4,550.

SUMMARY

Introduction

The insurance relationship is primarily one of contract, with the insurance policy as the principal source of the parties’ obligations. As with other types of insurance, the duties of the parties—and the consequences of breaching those duties—are affected by government regulation, primarily in the form of state statutes addressing insurer conduct. Another source of law affecting insurance obligations is the judiciary. As liability insurance disputes became a staple of the courts’ civil dockets during the second half of the twentieth century, recurring issues generated a significant body of common law. Nevertheless, in any study of the obligations of insurer and insured under liability coverages, there is no avoiding the oft-used insurer admonition, “Read Your Policy.”

SUMMARY

Last night, March 25, 2010, Congress passed a “reconciliation bill” that amends the Health Care Act signed by President Obama on March 23. The President is expected to sign the amended legislation next week. The amended legislation introduces a new 3.8 percent Medicare “contribution” payable by individuals, and some estates and trusts, on “net investment income.” The new tax will first apply in 2013.

SUMMARY

On March 23, President Obama signed into law the Patient Protection and Affordable Care Act (Pub. L. No. 111-148). Section 6002 of the Act (the “new federal law”) creates significant new obligations for drug and device manufacturers, by requiring annual disclosure filings detailing their financial relationships with physicians and teaching hospitals. These new federal requirements are also known as the “Sunshine” provisions, since they were originally proposed in 2007 as the “Physician Payments Sunshine Act” by Senators Charles Grassley and Herb Kohl.  [continues...]

SUMMARY

The Patient Protection and Affordable Care Act of 2009 (Pub. L. No. 111-148),¹ which President Obama signed into law on March 23, 2010 imposes an annual fee on medical device manufacturers and importers. The “Health Care and Education Affordability Reconciliation Act of 2010” (H.R. 4872, or the “Reconciliation Package”) ², as revised by the amendment reported to the Reconciliation Package on March 20, 2010, and passed by the House of Representatives on March 21, 2010,³ would impose an excise tax on medical device manufacturers. Below we provide an overview of these provisions, which are found in Section 9009 of Pub. L. No. 111-148 and Section 1405 of the Reconciliation Package, and how the two provisions differ.  [continues...]

SUMMARY

On December 24, 2009, the U.S. Senate passed the Patient Protection and Affordable Care Act (H.R. 3590), its version of comprehensive healthcare reform legislation. On March 21, 2010, the U.S. House of Representatives also passed this legislation. Included therein is a provision (Section7002) amending the Public Health Service Act to permit approval of biosimilar biological products through an abbreviated biological license application (ABLA) submitted to the Food and Drug Administration (FDA).

SUMMARY

The Food and Drug Administration (FDA) announced on September 30 that it has released a draft guidance [.pdf] for industry, titled “Format and Content of Proposed Risk Evaluation and Mitigation Strategies (REMS), REMS Assessments, and Proposed REMS Modifications.”  Comments to the draft guidance are due by December 30, 2009, and should be submitted according to the instructions in the Federal Register [.pdf] notice announcing the draft guidance.

SUMMARY

In an unusual “preliminary report” released yesterday, the Food and Drug Administration (FDA) admitted to “multiple departures from processes, procedures, and practices” in the 510(k) clearance of ReGen Biologics’ Menaflex knee repair implant, which “leave[s] the basis for a review decision in question.”  The report, authored by FDA Acting Chief Counsel Michael Landa, Acting Chief Scientist Jesse Goodman, and Associate Commissioner for Policy and Planning Jeffrey Shuren, recommends an independent science-based reevaluation of the Menaflex 510(k) clearance decision.

SUMMARY

Overview

On July 16, 2009, the Massachusetts Special Commission on the Health Care Payment System (“the Commission”) released its final report [.pdf], in which it recommends abolishing the traditional “fee-for-service” (“FFS”) payment model for all public and private payers in Massachusetts, and replacing FFS with a “global payments” model. Under a global payments model, health care providers would be compensated prospectively for most (or all) of the care their patients will receive over a set contractual period.  As Massachusetts would be the first state in the nation to eliminate FFS for both public and private payers, this proposal would, if implemented, constitute a significant change in how health care is delivered and reimbursed.  Additionally, the Massachusetts payment reforms could provide a model for national payment reform initiatives. Understanding the Commission’s recommendations is therefore crucial for anyone involved in the  health care, insurance, biotechnology, or drug and device sectors. [continues...]

SUMMARY

In March, President Obama signed an executive order lifting the Bush Administration restrictions on federal funding for human embryonic stem cell (HE S) research. The possibility of new federal funding opportunities, in combination with more than a decade of scientific advances in both embryonic and adult stem cell research, signal that stem cell-based therapies (“SCBT”) could soon be available for patients in a clinical setting. For those wishing to commercialize such therapies, it will be important to ascertain how the U.S. Food and Drug Administration (“FDA ”), which has regulatory authority over U.S. marketing of SCBT, will exercise this oversight.

This article is not intended to be an exhaustive dissertation on all laws and regulations pertaining to stem cell research, embryonic or otherwise.1 Rather, it discusses the controversial history of federal funding for stem cell research, and then focuses on regulations and guidelines likely to govern FDA approval of clinical applications of SCBT. It also discusses some of the recent recommendations included in the International Society for Stem Cell Research Guidelines in the context of U.S. application of those recommendations.  (continues...)

SUMMARY

In a recent opinion issued by the Health and Human Services (HHS) Office of Inspector General (OIG) on May 14, 2009, Advisory Opinion No. 09-05 [.pdf], the OIG concluded that there are circumstances under which a hospital may compensate physicians for taking on-call coverage in the emergency department without running afoul of the federal Anti-Kickback statute.  The OIG’s advisory opinion enters a space that has not yet been filled with guidance from the Centers for Medicare & Medicaid Services (CMS).  Although OIG Advisory Opinions are written to apply only to the party that requested the opinion, hospitals should be aware of this recent development as it relates to requirements under Emergency Medical Treatment and Labor Act (EMTALA), 42 U.S.C. §1395dd, and its regulations, at 42 C.F.R. 489.24. [continues...]

SUMMARY

On March 9, 2009, President Obama lifted former President Bush’s restrictions on federal funding for human embryonic stem cell research by signing Executive Order 13505: Removing Barriers to Responsible Scientific Research Involving Human Stem Cells. In the Executive Order, the President permits the Secretary of Health and Human Services (“HHS”), through the Director of the NIH, to support and conduct “responsible, scientifically worthy human stem cell research, including human embryonic stem cell research, to the extent permitted by law.”

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SUMMARY

On May 1, 2009 the Centers for Medicare & Medicaid Services (CMS, or the Agency) issued a proposed rule (.pdf) for the FY2010 Medicare hospital inpatient prospective payment systems (IPPS). The regulation proposes revisions to policies and payment rates for general acute care hospitals paid under the Medicare hospital IPPS and also inpatient stays in long-term care hospitals (LTCHs) under the LTCH Prospective Payment System (LTCH PPS). The proposed rule would also implement certain provisions made by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA, Pub. L. 110-275) and the American Recovery and Reinvestment Act of 2009 (ARRA, Pub. L. 111-5).

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