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FDA Says Yes to Pre-Approval Communications with Payors but Reaffirms its Approach to Restrictions on Off-Label Communications

Early January has seen the release by FDA of a flurry of information on drug and device manufacturer communications, largely reaffirming FDA’s long-held approach to restricting manufacturer communications regarding off-label uses of approved drugs and medical devices. The most significant positive development arising from these documents is the Agency’s concession on proactive pre-approval communications with payors about investigational drugs and devices, allowing certain information to be provided to payors prior to a product’s approval. FDA’s guidance documents issued this week also clarify some grey areas surrounding the circumstances under which manufacturers may communicate about information that is consistent with or … Continue Reading

Parallel Review – Forcing Manufacturers to Go All In

On October 24, 2016 the Food and Drug Administration (“FDA”) in conjunction with the Centers for Medicare & Medicaid Services (“CMS”) announced their intention to extend the Parallel Review pilot program indefinitely. The Parallel Review process is intended to provide timely feedback on clinical data requirements from FDA and CMS, and minimize the time required for receiving Medicare coverage nationally.  Sounds good.  So, why have so few manufacturers taken advantage of the program to date?

Despite its admirable goals, the current Parallel Review Process is too limited in scope and involves significant risks for manufacturers.

The standard process for obtaining … Continue Reading

Disruptor Meets Regulator, and Regulator Wins: Lessons Learned from Theranos

On July 7, 2016, the Centers for Medicare and Medicaid Services (“CMS”) imposed several administrative penalties on Theranos, a clinical laboratory company that proposed to revolutionize the clinical laboratory business by performing multiple blood tests using a few drops of blood drawn from a finger rather than from a traditional blood draw that relies on needles and tubes. However, after inspecting the laboratory, CMS concluded that the company failed to comply with federal law and regulations governing clinical laboratories and it posed an immediate jeopardy to patient health and safety. CMS has revoked the CLIA certification of the company’s California … Continue Reading

District Court Invalidates Payment of Cost-Sharing Subsidies, Setting Up Additional Legal Tests for the Affordable Care Act

In its recent decision in U.S. House of Representatives v. Burwell,[1] the U.S. District Court for the District of Columbia ruled that the Obama administration’s payment of cost-sharing subsidies for enrollees in plans offered through the Affordable Care Act’s Exchanges is unauthorized for lack of Congressional appropriation. The decision would affect future cost-sharing subsidies, though the court immediately stayed the decision pending its outcome on appeal.[2]

In its decision, the court found in favor of the members of the House of Representatives, based upon its interpretation of the applicable law. Specifically, the court found that, when Congress passed … Continue Reading

Surprise Health Care Bill Protections Addressed in President Obama’s 2017 Budget for Health and Human Services

In its Fiscal Year 2017 Private Insurance Legislative Proposals, President Obama’s Budget contains a provision seeking to “eliminate surprise out-of-network healthcare charges for privately insured patients.” Described as an attempt to “promote transparency on price, cost, and billing for consumers,” this measure requires hospitals and physicians to collaborate so that patients receiving treatment at in‐network facilities do not face unexpected charges from out‐of‐network practitioners. This provision could have far-reaching effects, potentially impacting enrollees in traditional commercial plans, Exchange plans and government plans (such as Medicare Advantage plans).

A surprise bill situation arises when patients incur unexpected, out‐of‐network charges when … Continue Reading

U.S. District Court Vacates HRSA’s Interpretative Rule on Orphan Drugs

On Wednesday, October 14, 2015, the U.S. District Court for the District of Columbia (the “Court”), Judge Rudolph Contreras, vacated the Health Resources and Services Administration’s (“HRSA”) interpretive rule on Orphan Drugs (“the Interpretative Rule”) as “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”[1]  As a result of the ruling, pharmaceutical manufacturers are not required to provide 340B discounts to certain types of covered entities for Orphan Drugs, even when the drugs are prescribed for uses other than to treat the rare conditions for which the Orphan Drug designation was given.[2]  This issue … Continue Reading

More Time Given To Stakeholders to Respond to CMS’ Request for Information on Physician Payment Reforms

On September 28, 2015, the Centers for Medicare & Medicaid Services (“CMS”) issued a request for information (“RFI”) seeking comments on two key components of the physician payment reform provisions included in the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”), the law enacted on April 16, 2015, repealing the sustainable growth rate formula used to update payment rates under the Medicare Physician Fee Schedule.  The RFI was originally open for a 30-comment period.  However, CMS has announced that it is extending the comment period for an additional 15 days.  Comments to the RFI are now due to CMS Continue Reading

Musings on the MLR

As we ended the summer of 2012, the Obama administration touted one of the more popular aspects of the Affordable Care Act – the requirement that health insurers spend at least 80 cents of every premium dollar on medical care and health care quality (85 cents for large employer groups purchasing health insurance), and if they do not, requiring these insurers to rebate the difference back to subscribers or their employers. According to the Administration, the “80/20 Rule” or the “Medical Loss Ratio (MLR) Rule,” as it alternately known, resulted in 12.8 million Americans receiving directly or indirectly more than $1.1 Continue Reading