Quality of Health Care

Recent federal and state legislative efforts signal an increased focus on a significant and largely underappreciated public health threat – antimicrobial resistance (i.e., when a microorganism (such as a bacteria or virus) is able to resist the effects of medications such as antibiotics and antivirals, causing such medications to be ineffective). The results of a 2014 study underscore the magnitude of the threat of so-called “superbugs,” estimating that the number of deaths worldwide attributable to antimicrobial resistance will reach 10 million by 2050.  By comparison, the same study projected 8.2 million deaths from cancer, and 1.2 million deaths from traffic accidents by 2050.  Legislative efforts to address antimicrobial resistance span from encouraging development of new pathways to market for antimicrobial drugs to expanding data collection and monitoring efforts to better understand the scope of the problem.  The combination of new data and less-restrictive pathways to market simultaneously provide pharmaceutical companies with a faster entry into the market for antimicrobial drugs and a better understanding by local health departments and hospitals of the need for new drugs to combat resistant strains of microorganisms.

Federal Initiatives

On the federal side, the 21st Century Cures Act (the “Act”), signed into law by President Obama on December 13, 2016, includes several measures related to antimicrobial resistance.  For example, the Act creates a new approval pathway for “limited population drugs,” which are antibacterial or antifungal drugs “intended to treat a serious or life-threatening infection in a limited population of patients with unmet needs.” While the Act allows FDA to approve limited population drugs with less data than typically would be required, the approval is restricted to “the intended limited population,” and the manufacturer must meet additional labeling requirements to inform physicians of the drug’s limited approved use.  In addition, manufacturers of drugs approved through this pathway are required to submit any promotional materials to FDA at least 30 days before they plan to use them.

While adding specific labeling requirements for new drugs approved for limited populations, the Act also changes labeling requirements for susceptibility test interpretive criteria. Susceptibility test interpretive criteria includes the myriad of testing options used to determine whether a patient is infected with a specific microorganism or class of microorganism that can effectively be treated by a drug.  The Act requires pharmaceutical manufacturers to replace the currently existing susceptibility test interpretive criteria from the drug’s packaged insert or labeling with a reference to a FDA website to be built where such criteria for all drugs will be held.  Manufacturers have one year from the day the website is established to move its susceptibility test interpretive criteria to the so-called “Interpretive Criteria Website.”

The Act also increases monitoring and reporting of antimicrobial drug use and antimicrobial resistance at federal healthcare facilities, like VA hospitals and facilities run through the Indian Health Service or the Department of Defense. Further, it requires annual federal data reporting on aggregate national and regional trends related to antimicrobial resistance. A broad base of reliable data on antimicrobial resistance and the associated morbidity and mortality does not currently exist. However, along with the federal government, certain states are also making efforts to improve data collection in this space.

State Initiatives

Many states receive funding from the Centers for Disease Control (CDC) to collect data about patients with extremely resistant strains of microoganisms, like carbapenem-resistant Enterobacteriacea, or “CRE” – a bacteria that kills an estimated 600 Americans each year. The Illinois Department of Health, for example, developed a registry in 2014 that tracks positive lab tests for extremely drug-resistant organisms, including CRE.  Illinois began tracking this information following a deadly outbreak of CRE in 2013.  Health care facilities participating in the registry receive alerts when an infected patient is transferred in and must report CRE-positive culture results of patients within seven calendar days.  The most recent annual report shows a 7% increase in overall cases; however, a recent article posits that the increase may be somewhat attributable to better reporting efforts by hospitals gaining experience identifying CRE.  Similar programs exist in many states, but these programs typically do not track the outcomes of CRE cases.

A recently proposed bill in California (California Senate Bill 43) would require hospitals to include information within death certificates that identifies whether “any antimicrobial-resistant infection…was a factor in the death.”  Specifically, the bill would require the “attending physician [who] is legally obligated to file a certificate of death” to determine whether, in the physician’s professional judgment, an antimicrobial-resistant infection was a factor in the patient’s death.  State law already mandates tracking of over 80 communicable diseases, like HIV and Hepatitis (A-E), but only tracks antibiotic-resistant infections of VRE and MRSA if they are contracted while a patient is already in the hospital.

Given the magnitude of the potential threat, it is reassuring that legislative initiatives are showing an increased focus on antimicrobial resistance. New pathways to market for antimicrobial drugs and increased public awareness of the rising threat of “superbugs” should lead to additional innovation by drug manufacturers.  The limited population pathway may also cause some manufacturers to reassess their pipelines and strategies to market drugs toward limited populations.  For manufacturers facing expensive and burdensome FDA requirements to market new antimicrobials to a general population, the limited population pathway may provide a cheaper and faster entry into the market.  Early entry into the market can then fund additional efforts expand the label beyond a limited population.

2016 is poised to be a major year in network adequacy developments across public and private insurance markets.  Changes are ahead in the Medicare and Medicaid managed care programs, the Exchange markets and the state-regulated group and individual markets, including state-run Exchanges.  The developing standards and enforcement will vary significantly across these markets.

Through 2014 and 2015, major news stories discussed concerns over the growing use of narrow provider networks by issuers on the Affordable Care Act’s insurance exchanges (“Exchanges”).  Others reported on enrollees’ frustration with receipt of unexpected charges from out-of-network practitioners when receiving treatment at in-network facilities (often referred to as “surprise bills”).  As a result, calls for improved network adequacy and transparency mounted.  A September 2014 HHS Office of Inspector General (OIG) report was critical of variation in state oversight of the Medicaid managed care market.  An August 2015 Government Accountability Office (GAO) report called for greater CMS network oversight in the Medicare Advantage market.  In response, a series of proposed rules and other changes have accumulated –

Medicare Advantage (MA) – In April 2015, CMS announced in a Call Letter that it will impose more stringent network adequacy requirements in the application process for MA plans.  To address surprise provider terminations, CMS will require 90 days notice of any significant mid-year changes.  Additionally, plans must establish and maintain a process to keep provider directories current in real-time.  CMS intends to monitor compliance and is considering a CY2017 requirement for standardized electronic submission for inclusion in a nationwide provider database.  CMS has also expressed its intent to review network adequacy as part of its regular program audits, as a pilot in 2016 and as a standard feature in 2017.

Medicaid Managed Care – In May 2015, CMS released the first proposed rule to make comprehensive changes to its Medicaid managed care rules in 12 years, including new quantitative network adequacy standards.  Once finalized, states would be required to establish time and distance standards for specific provider types, including primary care (adult and pediatric), OB/GYN, behavioral health, specialists (adult and pediatric), hospital, pharmacy, pediatric dental, and any “additional provider types when it promotes the objectives of the Medicaid program for the provider type to be subject to such time and distance standards.”[1]  Interestingly, CMS suggested in its proposed rule that states look to MA and state commercial standards as models.

Federal Exchanges – In December 2015, CMS, through its Center for Consumer Information and Insurance Oversight (CCIIO), released a proposed rule that featured more prescriptive network adequacy standards for Qualified Health Plans (QHPs) offered on the federal Exchange.  Where CCIIO is satisfied that a state uses “an acceptable quantifiable metric,” it will defer to their review of QHPs.  In other states, a default federal standard would apply.  Starting in 2017, CMS expects to take a similar approach as to MA and apply time and distance standards, with an emphasis on high-utilization specialties.  While CMS says it will not “prohibit certification of plans with narrow networks or otherwise impede innovation in plan design,”[2] it intends to set a floor with the federal Exchange default standards and it seeks greater network transparency.  Toward that end, ratings on QHP network coverage may be a future feature of HealthCare.gov.

State Regulated Group and Individual Markets – In November 2015, the National Association of Insurance Commissioners (NAIC) released a long-awaited network adequacy model act with more detailed requirements than federal and many state standards.  While the act would not impose quantitative standards such as provider number and type requirements, it does include reimbursement parity provisions for emergency and out-of-network facility-based providers.

Looking Ahead

With legislative sessions underway in all but four states this year, there are several important developments to watch for in 2016.  Some states will adopt the NAIC model act, in whole or in part, or use the act as a baseline from which to tailor its own standards.  Other states will decline to adopt it, leaving existing standards intact that range from minimal to highly detailed and prescriptive.  With increasing pressure from CMS across markets, some states may seek to aggressively increase the specificity of their network adequacy standards, adding number and type requirements or legislating that their insurance commissioners do so through an administrative process.  Some states may consider aligning standards across markets to ensure regulatory uniformity.  While there is nothing in the model act that suggests states increase oversight and enforcement activities, CMS is clearly increasing its own oversight and is pushing states to set a floor for state level access standards.  Changes to the landscape will come better into focus as CMS releases its final rules for all of the above proposed changes.

 

[1] 80 Fed. Reg. at 31145.

[2] 80 Fed. Reg. at 75550.

The Centers for Medicare & Medicaid Services (“CMS”) expects Qualified Health Plan (“QHP”) Issuers to be more familiar with Marketplace requirements and better reflect those standards in Issuers’ written policies and procedures, officials stated at the recent 2015 QHP Certification Conference held at CMS Headquarters in Baltimore, Maryland.

Twenty-three Issuers across fifteen Federally-facilitated Marketplace (“FFM”) States were audited for compliance with Federal QHP requirements during 2014.  The audits focused largely on QHP’s policies and procedures relating to FFM operations, including oversight of first tier, downstream and related entities (“FDRs).  While CMS held to its previously announced policy to not pursue sanctions against non-compliant Issuers which made a good faith effort to comply with requirements, officials noted that audit findings showed a lack of familiarity with Federal QHP requirements.  Many QHPs’ Marketplace-related policies and procedures were either non-existent, newly created near the time of the audit or generic, not addressing Marketplace-specific requirements.  Other common findings included QHP failure to:

  • Meet notice accessibility requirements;
  • Address requirements on maintaining current and accurate provider directories;
  • Ensure compliance with agent/broker training and registration requirements; and,
  • Ensure that agent/broker compensation is equal inside and outside the Exchange.

CMS is reviewing available data to select Issuers for audit during 2015.  Audit initiation will be staggered throughout the year and may be conducted on a standard or expedited timeframe.  The process may be managed as a desk review or may be onsite, but will include review of QHP systems and documents as well as interviews and will look at QHP oversight of FDRs.  Despite CMS’s decision to extend its good faith compliance policy through 2015, it may be difficult to find a QHP to have acted in good faith where policies and procedures fail to reflect FFM requirements, such requirements remain unimplemented or QHPs fail to monitor contractor compliance with FFM rules.

By Arthur J. Fried.

In what is being called an historic announcement, Department of Health and Human Services Secretary Sylvia Mathews Burwell announced on Monday the setting of clear goals and timeframes for moving Medicare from volume to value payments.  The stated goals are to tie 30% of all Medicare provider payments to quality and cost of care by 2016, moving to 50% by 2018.   Nearly all fee-for-service payments will be aligned with quality and value – 85% by 2016 and 90% in 2018.  This transformation will be achieved by the expansion of mechanisms already in use – Accountable Care Organizations, Patient Centered Medical Homes, and Bundled Payments.  Like the Affordable Care Act itself, HHS believes that its initiative will unleash an even stronger movement in the private sector towards alternative payment methodologies, and is establishing the “Health Care Payment Learning & Action Network” to promote this public-private partnership, to be kicked-off in March.

While some reports regarding these approaches have shown mixed results, Secretary Burwell cited data showing savings of $116 billion from previous trends, and anticipates even further inroads into the cost curve with Monday’s announcement.  Various national provider associations were supportive of the initiative. Others noted, however, that physicians need flexibility in the way payments are administered and that continued reductions in payments to hospitals could impair their ability to invest in delivery reforms.  Some urged HHS to recognize the value of new treatment and pharmacological advances in the developing payment methodologies.

Whatever the outcome of these initiatives, this announcement signals that government payment policies will continue to strongly influence the transformation of the American health care system for the foreseeable future. Indeed, almost immediately, several large hospital systems and payors likewise announced significant goals for quality and cost incentives in their contracts.

By Stuart Gerson

As we noted in our various blogs and communications on the subject (HEAL Advisory and HEAL Blog), the United States Court of Appeals for the District of Columbia Circuit’s action today, to rehear in December the Halbig case (Halbig v. Burwell, D.C. Cir., No. 14-508 ), challenging  Obamacare subsidies in the federal health exchange, is not unexpected given the current makeup of the Court. This development now makes it more likely that the Supreme Court will not take action on the King cert petition (King v. Burwell, U.S. 4th Circuit , No. 14-1158) until after the DC Circuit decides the Halbig case, which will be argued on December 17th.  The DC Circuit’s likely action (either vacating the panel opinion or overturning it) also will erase the split in the circuits and thus make it less likely that there will be four SCOTUS  Justices who will vote to take the case.

Epstein Becker Green and EBG Advisors, as part of the Thought Leaders in Population Health Speaker Series, will host a complimentary webinar in August on emerging trends in value-based purchasing in health care. The session, Population Health Strategies for Employer-Based Coverage, will assess how employers and other health plan sponsors are developing new programs to promote enhanced clinical and financial outcomes for the groups and populations they manage. In particular, speakers will highlight how the Affordable Care Act (ACA) is influencing population health management strategies for employer-based coverage.

The webinar, scheduled for August 26, 2014, at 12:00 p.m. ET, will be led by two thought leaders from the Health Care Incentives Improvement Institute (HCI3): Francois de Brantes, MS, MBA, Executive Director; and Douglas Emery, MS, Program Implementation Leader, Western Region. Gretchen K. Young, Senior Vice President, Health Policy, The ERISA Industry Committee (ERIC), will also serve as a panelist and Adam Solander, Associate, Epstein Becker Green, will moderate the session. To register, click here.

During the webinar, the panelists will discuss:

  • How ACA’s Cadillac tax on health benefits is changing the way employers pay for insurance coverage and how employees access and use insurance and wellness benefits.
  • How employers are creating and implementing new incentive programs to align prudent purchasing with proper care management techniques.
  • Emerging legal and reporting requirements based upon ACA and state requirements.

The Thought Leaders in Population Health Speaker Series offers participants informative and insightful guidance on how population health strategies are transforming the health care paradigm as the industry moves towards measurement and management of integrated delivery systems such as accountable care organizations (ACOs). All previous webinar programs can be viewed online. To register for this session, please click here.

“The Population Health Webinar Series attempts to find some common ground for health care professionals and other health care stakeholders by identifying best practices and creating a call to action for collaboration and outcomes improvement nationwide,” says Mark Lutes, Chair of Epstein Becker Green’s Board of Directors. “From the Affordable Care Act and data analytics to advancement in health IT systems, a number of factors are having a significant impact on the health care delivery system.”

________________________

The Speakers

Francois de Brantes, MS, MBA, Executive Director, Health Care Incentives Improvement Institute

As Executive Director of HCI3, Mr. de Brantes is responsible for setting and implementing the strategy of the organization. This includes supervising the implementations of Bridges To Excellence and PROMETHEUS Payment pilots, leading the development of new programs, and designing incentive efforts for employers, health plans and provider organizations.

Previously, Mr. de Brantes was the Program Leader for various health care initiatives at GE Corporate Health Care Programs, responsible for developing the conceptual framework and the implementation of GE’s Active Consumer strategy.

Mr. de Brantes attended the University of Paris IX – Dauphine where he earned a MS in Economics and Finance. After completing his military service as a platoon leader in a Light Cavalry Regiment, he attended the Tuck School of Business Administration at Dartmouth College, where he graduated with an MBA.

Douglas Emery, MS, Program Implementation Leader, Health Care Incentives Improvement Institute

Mr. Emery serves the Operations Manager for the Western Region for HCI3. He has been working in health care reform policy for over 15 years. Beginning in 1991, at the Institute of Political Economy, he and other colleagues began to work out a new microeconomic model for health care economics and episode of care purchasing.

Since then, Mr. Emery has worked in the public sector (Public Employees Health Program of Utah) and the private sector as an executive and consultant (Oxford Health Plans, HealthSouth, HealthMarket, Medstat, Definity Health, and others).  Mr. Emery has published many articles and two books on moving toward a more consumer-directed model and episode purchasing.

Gretchen K. Young, Senior Vice President, Health Policy, the ERISA Industry Committee

Ms. Young is the Senior Vice President, Health Policy, for the ERISA Industry Committee (ERIC). She works in Washington, D.C., where her primary responsibilities include working as a registered Congressional lobbyist on federal health issues and monitoring the work of Congress and the executive agencies with respect to health benefits.

Her primary focus over the past two years has been the Affordable Care Act and the accompanying regulations. She also has devoted considerable time and attention to employer wellness programs and the threats to them posted by the Genetic Information Nondiscrimination Act and the Americans with Disabilities Act.

Prior to her work at ERIC, Ms. Young covered both retirement and health issues for several large consulting forms. She has worked for over 25 years in the employee benefits field, including stints at three federal agencies that regulate ERISA plans – IRS, PBGC, and DOL.

Adam Solander, Associate, Epstein Becker Green

Session moderator Mr. Solander is an associate of Epstein Becker Green’s Health Care and Life Sciences practice, in the firm’s Washington, DC office. Mr. Solander advises health care clients on issues concerning ERISA preemption, obligations of plan fiduciaries and breach of fiduciary duties, prohibited transactions, and denial of benefits. He is also has experience advocating on behalf of health care trade associations and disease-specific patient advocacy groups, to the Congressional and Executive branches.

To learn more, log on to www.ebgadvisors.com or click here to register for any of these webinars. A Q&A period will follow the webinar, so don’t miss this unique opportunity for leading population health experts to answer your questions. To listen to the previous webinars from our Thought Leaders in Population Health Speaker Series, please click here.

 

 

Epstein Becker Green and EBG Advisors, as part of their Thought Leaders in Population Health Speaker Series, will host a complimentary webinar in July on emerging trends in population health. The webinar—What Role Do Patient Engagement Strategies Play in Promoting Population Health?—will examine different approaches to target, engage, and modify individual behaviors to lead a healthier lifestyle. Key thought leaders in population health will share examples of ways to engage high-risk and chronically ill groups so as to achieve meaningful clinical and financial outcomes.

This webinar, scheduled for July 31, 2014, at 12:00 p.m. ET, will be led by Kathleen Ann Fraser, RN-BC, MSN, MHA, CCM, CRRN, President, Case Management Society of America (CMSA); and Ben Gardner, Founder and President, Linkwell Health, a leading technology-enabled content marketing company serving health plans. Linda Tiano, Member, Epstein Becker Green, will moderate the session. To register, click here.

During the webinar, the panelists will discuss:

  • Methods to promote better eating and exercise
  • Avenues to promote healthy behaviors and address chronic disease head-on
  • Ways to improve medication adherence
  • Approaches to optimize provider involvement in patient care over the continuum
  • Strategies to benchmark positive change in targeted populations and provide meaningful feedback loops to the patients

The summer webinars of the Thought Leaders in Population Health Speaker Series will focus on key aspects of the emerging population health paradigm, addressing big data and IT integration issues, patient engagement strategies, and population health strategies for employer-based coverage. The tenth session in the series will be held on August 26. The presentation, Population Health Strategies for Employer-Based Coverage, will assess how the Affordable Care Act is influencing population health management strategies for employer-based coverage.  To register, please click here.

“This webinar series attempts to find some common ground for health care professionals and other health care stakeholders by identifying best practices and creating a call to action for collaboration and outcomes improvement nationwide,” says Mark Lutes, Chair of Epstein Becker Green’s Board of Directors. “From the Affordable Care Act and data analytics to advancement in health IT systems, a number of factors are having a significant impact on the health care delivery system.”

________________________

The Speakers

Kathleen Ann Fraser, RN-BC, MSN, MHA, CCM, CRRN, and President, CMSA

Ms. Fraser has an extensive background in hospital nursing, which includes emergency room and labor and delivery experience, and as a Director of Nursing.  She became a Case Manager 21 years ago, creating the first Case Management Department for a large national health care system.   For the past 19 years, she has specialized in workers’ compensation, and, for the past 14 years, she has been a Regional Director of Managed Care Case Management for Zurich Financial Services.

Ms. Fraser is the current President of the CMSA National Board of Directors and will serve in this position through June 2016. She is also on the Role Delineation and Expert Panel Committees of the American Nurses Association Certification Council for Case Management.  She is the current Immediate Past-President of the Houston/Gulf Coast Chapter of CMSA and, during the past 21 years, has served three previous chapter presidency terms in Houston. She has also served twice as Chair of her chapter’s Annual Educational Conference and is a past Houston/Gulf Coast CMSA Case Manager of the Year.

Ben Gardner, Founder and President, Linkwell Health

Mr. Gardner founded Linkwell Health in 2007 with the mission of developing simple, meaningful ways to engage and empower consumers to promote healthier lifestyles. His 20+ years of experience span both the health care and marketing services sectors, working primarily in startup and early stage businesses.

Mr. Gardener’s earlier career was focused on health care, working with such companies as Stryker Medical (medical devices) and HPR (clinical software). He graduated from Bentley University with a B.A. in Marketing.

Linda Tiano, Member, Epstein Becker Green

Session moderator Ms. Tiano is a member of Epstein Becker Green’s Health Care and Life Sciences practice, in the firm’s Washington, DC, and New York offices. She has more than 30 years of experience serving clients in the health care industry, in legal and executive capacities.

Ms. Tiano has published extensively in the health law area and is a regular speaker at industry conferences. She is also a former adjunct faculty member at the New York University Graduate School of Public Administration. In 2013, Ms. Tiano was selected as a “Leading Lawyer” in the Health Insurance category by The Legal 500 United States.

 

To learn more, log on to www.ebgadvisors.com or click here to register for any of these webinars. A Q&A period will follow the webinar, so don’t miss this unique opportunity for leading population health experts to answer your questions. To listen to the previous webinars from our Thought Leaders in Population Health Speaker Series, please click here.

 

By Arthur J. Fried

The Controversy – 2012 Rulemaking Attempts

Roughly two years ago, the Centers for Medicare and Medicaid Services of the Department of Health and Human Services (“CMS”) published final regulations announcing two controversial rule changes addressing hospital governance.  The industry was taken by surprise, to say  the least, as neither of these requirements had been in the proposed rule.  The changes, promulgated as amendments to the Governing Body Condition of Participation (CoP) included (i) the requirement that a hospital’s board include at least one member of its medical staff; and (ii) a statement in the preamble interpreting 42 C.F.R. § 482.22 to require that each hospital within a multi-hospital system have a separate, independent medical staff.  77 Fed. Reg. 29034, May 16, 2012. A groundswell of opposition arose immediately, led by the American Hospital Association, on both the procedural side, as the issues had not been vetted through a proposed rule, and substantively as well.  The American Medical Association supported the changes.  CMS quickly concluded that it needed additional time to evaluate these issues, and on June 15, 2012 issued an instruction to State Survey Agency Directors that placed the requirement to include members of the medical staff on the hospital’s governing body on hold until CMS had addressed the issue “completely” and indicated that in the interim neither the amended CoP nor the interpretation would be implemented. At that point we opined that it would “be quite some time before these issues will resurface.”  Our prior blog post on these issues can be found here.

CMS Addresses Stakeholder Concerns

Medical Staff Representation on Hospital Board

Almost two years to the day after that aborted rulemaking, CMS responded to the concerns that had been raised.  On May 7, 2014, pursuant to President Obama’s Executive Order 13563, “Improving Regulations and Regulatory Review” (Jan. 18, 2011), CMS issued Medicare and Medicaid Programs; Regulatory Provisions to Promote Program Efficiency, Transparency, and Burden Reduction; Part II (Final Rule) which, among other things, revisited these CoP governance issues.  The heretofore unenforced requirement that a hospital’s governing body include a physician from its medical staff has been removed.  CMS remains committed, however, to the importance of the medical staff perspective on the quality of care being heard by a hospital’s governing body.  It thus replaced that requirement with a new provision in the “Medical Staff” standard of the governing body CoP that requires a hospital’s governing body to directly consult periodically throughout the year with the individual responsible for the organized medical staff of the hospital, or his or her designee. 42 C.F.R. § 482.12(a)(10). While CMS intends to leave some flexibility in implementation of this requirement to the hospital, it expects that such communications would be of an appropriate type and would occur at least twice a year, the type and frequency based upon such factors as (i) the scope and complexity of the services offered; (ii) the patient population served; and (iii) any issues that the institution’s performance improvement and quality assessment program might identify.  Direct consultation means that the governing body or a committee thereof engages in “immediate, synchronous communication,” either in person or through telecommunication.  For a multi-hospital system using a single governing body to oversee multiple hospitals, the governing body must consult directly with the individual responsible for the organized medical staff (or designee) of each hospital within its system. Of course, CMS also expects to see evidence that the governing body is appropriately responsive to any requests for timely (i.e. unscheduled) consultations.

Medical Staff in a Multi-Hospital System

Regarding the structure of the medical staff in a multi-hospital system, CMS has reinterpreted 42 C.F.R. § 482.22 to allow for either (i) a unique medical staff for each hospital (which CMS had previously considered to be the requirement, despite the recent trend to the contrary); or (ii) a unified and integrated medical staff shared by multiple hospitals within a hospital system.  CMS was provided with no evidence to indicate that having a “separate medical staff for each hospital within a system was inherently superior to the unified and integrated model.”  Indeed, in changing its interpretation, CMS cited some evidence that unified medical staffs contribute to improved patient care quality achievements, perhaps due to the enhanced ability of an integrated medical staff to standardize best practices and implement quality improvements.

At the same time, CMS revised § 482.22(b) to add the following requirements for the establishment of such unified medical staffs:  (i)  that the medical staff members holding privileges at each hospital in the system be advised of their rights to, and have voted either to participate in a unified and integrated medical staff structure or to maintain a hospital-specific separate and distinct medical staff for their respective hospital; (ii) that the unified and integrated medical staff have bylaws, rules, and requirements that describe its processes for self-governance, appointment, credentialing, privileging, and oversight, as well as its peer review policies and due process rights guarantees; (iii) that the unified and integrated medical staff be established in a manner that takes into account each hospital’s unique circumstances, and any significant differences in patient populations and services offered in each hospital; (iv) that the unified and integrated medical staff give due consideration to the needs and concerns of members of the medical staff, regardless of practice or location;  and (v) that there are mechanisms in place to ensure that issues localized to particular hospitals are appropriately considered and addressed.

Conclusion

CMS has clearly listened to its major constituents in this regard, and has devised sound resolutions to complex problems.  The new rules take effect on July 11, 2014, so the process for drafting and implementing appropriate institutional and medical staff bylaw amendments should begin immediately.


 

The Physician Payment Sunshine Act, which was incorporated into Section 6002 of the Affordable Care Act, requires pharmaceutical, medical device, biological and medical supply manufacturers to file annual reports on payments to physicians and teaching hospitals. Despite the requirement in the law that manufacturers submit their first report in March 2013 disclosing payments made during 2012, two events have pushed back that obligation or taken the sting out of noncompliance.

First, although Centers for Medicare & Medicaid Services (CMS) was required to publish standards for reporting information and making that information available online to the public, it has yet to publish final regulations. As recently as May 2012, it posted a blog notice on its website announcing that manufacturers will not be required to start collecting data until January 1, 2013. The reason given for the delay was that it simply needed time to sort through the over 300 comments that were received.

The second event that should be good news to manufacturers comes from Vermont. Vermont, along with eight other states and the District of Columbia, already have laws requiring manufacturers to report payments to physicians as well as financial penalties for failing to submit reports. Even though the Sunshine Act supersedes those state laws, any part of a state law that contains different or broader reporting requirements than the federal law remains in effect. However, since CMS has not published its regulations, answering that question may be more difficult than it appears at first. The good news is that the Vermont Attorney General has offered a limited amnesty to manufacturers of medical devices and biologics (but not pharmaceuticals) who did not report during any period between July 1, 2009 and December 31, 2011. The reprieve waives the penalties, but not registration fees or penalties under other state laws. While a complete report is not required immediately, the offer is for a limited time only and is good through October 1, 2012. Any inquiries should be sent to the Vermont Attorney General’s office at prescribedproducts@atg.state.vt.us.

For more information, contact the author at rwanerman@ebglaw.com.

by Jason B. Caron

On May 22, 2012, the Patient-Centered Outcomes Research Institute (“PCORI”), a private nonprofit entity established by the Patient Protection and Affordable Care Act of 2010, announced that it will be seeking applications to fund an initial $96 million in grants for innovative research projects in clinical effectiveness research. These grants will be awarded in four areas recently identified in PCORI’s National Priorities Research Agenda.

Read the full alert here

Adam L. Zavadil, a Summer Associate (not admitted to the practice of law) in Epstein Becker Green’s Washington, DC, office, contributed significantly to the preparation of this alert.